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$6.1 Billion In August Hedge Fund Inflows

Date: Friday, October 14, 2011
Author: Alex Akesson, HedgeCo.Net

BarclayHedge and TrimTabs Investment Research reports that hedge funds saw an inflow of $6.1bn in August, for the first eight months in 2011, hedge funds saw a heavy $51bn inflow.

“Recent inflows might owe in part to excellent relative performance,” Sol Waksman, founder and president of BarclayHedge said. “While the S&P 500 plunged 10.6% in the four months ended August, the Barclay Hedge Fund Index decreased only 5.6%. Additionally, our preliminary data for September reveals that hedge funds outperformed the S&P 500 by more than a 2:1 margin again last month.”

The most popular strategies turned out to be the fixed income hedge funds with heaviest inflow ($14.6bn in 2011). The study also recorded a 3.6% return in 2011, proving to be the best performing strategies.

“Prices have been soaring in many segments of the fixed income space.” Leon Mirochnik, associate portfolio manager at TrimTabs, said, “The flow data we track daily shows that TIPS ETFs sport a handsome year-to-date return of 10.4%. Even lowly muni ETFs, which are up 7.0% in 2011, have crushed stocks.”

The report also states that the managers have reversed their stance on the 10-year old Treasuries. Their bearish sentiments sank to 16% from 32% and bullish note rose to 23% in September from 15% in August.

“Hedge fund managers have zero interest in risk at present. They are clinging to the safety of Treasuries and the greenback and stiff-arming stocks. Nevertheless, hedge fund investors are forking over fresh cash, and managers must put it to work. This money could support equities in the final quarter of 2011, especially if hedge fund managers lever up in an attempt to end the year with a bang,” Mirochnik said.

Editing by Alex Akesson
For HedgeCo.net