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eVestment|HFN Industry Release: April 2012 |
Date: Thursday, May 10, 2012
Author: eVestment|HFN
Hedge Fund AUM Fell in April 2012, Performance was Negative amid Mixed Flows
- Hedge funds performance was mixed in April, but average returns were negative, -0.29% after one of the best first quarters on record. Funds outperformed the S&P 500 Total Return which was down -0.63% in April.
- Early indications show net investor flows were slightly negative for the second consecutive month in April, a reversal of the strong inflows mid-Q1.
- Large funds (>$1bb) again dominated inflows during the month, continuing the trend from Q1. 49% of reporting funds show net inflows in April, but 54% of large funds experienced core growth versus only 45% of mid-sized funds (>$250mm, <$1bb). Large funds accounted for virtually all reported inflows during the month and mid-sized funds the majority of redemptions while small fund flows were flat.
- Negative aggregate returns in April were due primarily to equity exposures to developed and emerging markets while volatile rate and commodity markets hurt smaller macro/managed futures funds. Healthcare and tech funds were anomalies for equity exposures and were able to eek out gains during the month.
- Credit strategies were generally positive with the rapidly declining treasury yields benefiting mortgage related strategies most. Large macro strategies outperformed their peers during the month as trend following in a choppy commodity market is proving difficult.
- The story for 2012 continues to be that investors do not yet appear interested in increasing exposure to equity markets despite the early strong returns. Credit and macro/commodity funds continue to receive net inflows, but macro fund flows are dominated by the larger strategies which have generally performed better.
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