More than $12.7 Billion Flowed out of Hedge Fund Industry in 12 Months Ending April. Hedge Fund Manager Late May Survey Finds Bearish Outlook on S&P 500 Reaches Six-Month High
BarclayHedge and TrimTabs Investment Research reported today that the hedge fund industry redeemed $5.1 billion (0.3% of assets) in April, reversing a $2.8 billion inflow in March. Based on data from 3,042 funds, the April TrimTabs/BarclayHedge Hedge Fund Flow Report estimated that industry assets stood at $1.7 trillion in April, up 1.6% for the first four months of 2012.
TrimTabs and BarclayHedge reported that more than $12.7 billion flowed out of the hedge fund industry between May 2011 and April 2012. There were net outflows in six of the 12 months. “That’s a sharp contrast from the previous 12 months, when the industry saw a net inflow of $90.7 billion and just three monthly outflows,” said Sol Waksman, founder and president of BarclayHedge.
Hedge funds lost 0.59% in April, besting the S&P 500’s April loss of 0.75%, but the industry trailed the popular financial industry benchmark for the first four months of 2012, returning 5.0% vs. a 11.2% gain for S&P 500, TrimTabs and BarclayHedge reported. “April’s results marked the first time in six months that the industry outperformed the S&P 500,” Waksman said.
Over the past 12 months, Fixed Income, Multi-Strategy and Macro funds represented the most popular strategies of hedge fund investors, attracting the largest cash inflows among 13 fund categories tracked by TrimTabs and BarclayHedge. “With interest rates near zero and central bankers flooding the markets with liquidity, Fixed-Income investors are chasing any yield they can get,” said Charles Biderman, founder and CEO of TrimTabs. Emerging Market and Equity Long Bias funds posted the highest outflows over the same time period.
Meanwhile, the May 2012 TrimTabs/BarclayHedge Survey of Hedge Fund Managers found that 35.6% of managers were bearish on the S&P 500 for June, while 30.5% were bullish, and 33.9% were neutral. Conducted in late May, the survey of 120 hedge fund managers found bearishness on the S&P 500 at a six-month high and bullishness at an eight-month low.
In the survey, bullish sentiment on the U.S. Dollar Index surged to 61.9% in May from 35.4 in April, a 15-month high. “Managers are responding to seemingly never-ending anxiety over Eurozone sovereign debt, which is punishing the euro and bolstering demand for the greenback,” said Leon Mirochnik, a financial analyst at TrimTabs.
When asked about the likelihood of the Federal Reserve launching another round of quantitative easing this year, over 28% of managers saw more than a 60% chance of that happening, while over 47% of managers saw less than a 40% likelihood.
The TrimTabs/BarclayHedge database tracks hedge fund flows on a monthly basis. The TrimTabs/BarclayHedge Hedge Fund Flow Report provides detailed analysis of these flows as well as relevant topical studies. Click here for further information.
BarclayHedge is a leading hedge fund data vendor and one of the foremost sources for proprietary research in the field of alternative investments. From its origin as a research specialist and performance measurement firm, BarclayHedge has developed complete client services as a publisher, database and software provider, and industry consultant.
TrimTabs Investment Research is the only independent research service that publishes detailed daily coverage of U.S. stock market liquidity--including mutual fund flows and exchange-traded fund flows--as well as weekly withheld income and employment tax collections. Founded by Charles Biderman, TrimTabs has provided institutional investors with trading strategies since 1990. For more information, please visit us here.
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