Hedge Funds Take In Almost $7B In Feb.

Apr 10 2012 | 10:19am ET

Although they continue to trail the S&P 500, hedge funds took in an estimated $6.8 billion in February, according to the latest numbers from BarclayHedge and TrimTabs Investment Research.

The February inflows reversed the trend seen in January 2012 and December 2011, when over $21.5 billion flowed out of funds.

Hedge fund managers returned 2.3% in February compared to 4.1% for the S&P 500. It’s the third straight month hedge funds have underperformed.

"Despite February’s inflows, below-average performance and net outflows have kept a lid on hedge fund assets near an estimated $1.72 trillion for the past five months,” said Sol Waksman, founder and president of BarclayHedge, in a statement.

Funds of hedge funds attracted $5.7 billion in February, after five months of outflows, and returned 1.4%.

“Recent flows into hedge-fund strategies seem to be indicating investors think the latest stock market rally has run its course,” said Charles Biderman, founder and CEO of TrimTabs. Equity long bias hedge funds saw outflows of $6.8 billion in February, the most since they shed $12.4 billion in December 2008. Meanwhile, equity long-short strategies attracted $1.5 billion in February, the highest inflows since April 2011 when they took in $1.7 billion.

Japan-based hedge funds have seen their assets under management surge 16.2% in the past year, despite losing 7.8%.

Meanwhile, the research providers' March survey of 98 hedge fund managers found that 63% thinks the Fed will raise rates before 2014 and another 67% does not expect the Fed to launch a third round of quantitative easing in 2012.


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