The hedge fund industry grew by 2.5% in September to reach $1.62 trillion, the most it has managed in six months.
Commodity trading advisers were the biggest beneficiaries of the inflows, according to TrimTabs Investment Research and BarclayHedge, taking in $5.8 billion on the month. The entire industry grew by just $3.8 billion in September.
Fixed-income hedge funds also saw big inflows, adding $1.3 billion on the month. By contrast, long-only equity funds and emerging markets funds suffered net outflows of $829 million and $269 million, respectively. And investors continued to abandon funds of hedge funds, pulling $635 million from the vehicles.
Separately, Nomura Holdings reports that the last three years have not been kind to quantitative hedge funds. Such funds manage 43% less than they did in 2007, halving their share of the actively-managed equity hedge fund market..
Most of the decline was due to poor performance, which amounted to 24% of the loss. The rest, however, was the result of investors fleeing that poor performance.
"We saw quants win new mandates in the first half of 2010, perhaps a bit of a sign of leveling-off of the outflows in 2010," Nomura's Inigo Fraser-Jenkins told Bloomberg News. "The problem is that since then, over the summer, their performance has suffered and that may give a bit of a knock to their ability to win mandates."