Hedge Funds posted $16.0 Billion inflow in October
Hedge funds took in $16.0 Billion (1.0% of Assets) in October 2010. TrimTabs Investment Research and BarclayHedge report that this is the fourth and the heaviest in a string of inflows reported this year.
Sol Waksman, founder and President of BarclayHedge, said that, “Hedge funds returned 1.95% in October and 7.10% in the four months following the May-June skid.” He adds that hedge funds are also overtaking the S&P 500 by about 21 basis points through November.
Sol Waksman, founder and President of BarclayHedge noted that hedge fund investors stepped out of their comfort zone and dared to venture into other areas like distressed securities which actually took in the heaviest inflow of $3.8 billion (3.3% of assets) in October. Emerging markets funds registered an inflow of 2.2 billion (1.0% of assets) while fixed income funds received the lightest inflow since April of only $506 million (0.3% of assets).
Recording its eighth straight inflow, Commodity trading advisors (CTAs) took in $7.9 billion (2.8% of assets), while funds of hedge funds posted a fourth straight inflow of $3.3 billion (0.6% of assets).
TrimTabs Executive Vice President of Research Vincent Deluard explains, “Borrowing money to buy assets is virtually costless, investors handed hedge fund managers $32.1 billion in the past four months, and margin debt is soaring…At the same time, the rolling 12-month beta of hedge fund returns sits below the long-term average, and that of equity long-short funds is dipping below zero.” He adds that, ”Managers should be especially eager to book fat profits through year-end, but they remain very reluctant to make directional bets on equities.”