Hedge Fund Industry Showed Signs Of Struggle In March - Report

Ainhoa Barcelona

10 May 2013

Investors placed a "meagre" $817 million into hedge funds in March, research by TrimTabs and BarclayHedge has found, signaling more hesitancy compared to February’s inflows of $11.4 billion.

The TrimTabs/BarclayHedge Hedge Fund Flow report took data from 3,409 funds and showed that the hedge fund industry underperformed the S&P 500.

"The industry delivered a return of 1.1 per cent in March, less than one third of the S&P 500’s 3.6 per cent rise. Although hedge funds delivered positive returns in 10 of the past 12 months, they trailed the S&P 500 by 450 basis points," said Sol Waksman, president and founder of BarclayHedge.

Those that did perform well were stock-picking hedge fund managers, just as they did in the first two months of this year, the report found. The best performing funds were equity long-only hedge funds, which rose 3.3 per cent in March, making them the strongest of the 13 major fund categories.

Fixed income and multi-strategy were the only strategies that posted inflows in the past 12 months, Waksman added.

In comparison, funds of hedge funds continued to shed assets, losing $2.6 billion in February and $53.2 billion in the past 12 months. They underperformed the hedge fund industry by 230 basis points over the past year.

In another survey among hedge fund managers, TrimTabs and BarclayHedge found that managers were worried about the stock market’s prospects for May and had an overall bearish outlook considering their opinions on 10-year treasuries and other indicators.