Hedge Funds Redeem $5B In April

Hedge funds saw outflows of $5.1 billion in April, reversing the $2.8 billion inflow of March, according to data from BarclayHedge and TrimTabs Investment Research.

BarclayHedge/TrimTabs estimated total industry assets at $1.7 trillion in April, up 1.6% for the first four months of 2012.

Between May 2011 and April 2012, over $12.7 billion flowed out of hedge funds and there were net outflows in six of the 12 months. “That’s a sharp contrast from the previous 12 months, when the industry saw a net inflow of $90.7 billion and just three monthly outflows,” said Sol Waksman, founder and president of BarclayHedge.

Hedge funds were down 0.59% in April, outperforming the S&P 500 which lost 0.75% for the month. Over the first four months of 2012, however, hedge funds have trailed the stock index, returning 5.0% compared to 11.2% for the S&P 500.

Fixed income, multi-strategy and macro funds have attracted the largest cash inflows in the past 12 months.  “With interest rates near zero and central bankers flooding the markets with liquidity, fixed-income investors are chasing any yield they can get,” said Charles Biderman, founder and CEO of TrimTabs. Emerging market and equity long-bias funds posted the highest outflows over the same time period.