Hedge Funds Net $4.7B In November

Jan 8 2013 | 9:45am ET

Hedge funds pulled in a net $4.7 billion in November (0.3% of assets), according to the latest numbers from BarclayHedge and TrimTabs Investment Research.

The November results, based on data from 2,935 funds. followed a $10.3 billion outflow in October.

The TrimTabs/BarclayHedge Hedge Fund Flow Report also showed that hedge funds outperformed the S&P 500 in November (a feat they accomplished rarely in 2012) earning 0.6% to the S&P's 0.3%. The gain marked the second consecutive month in which hedge funds outperformed the stock market.

“Two months of outperformance signal a notable shift from the dominant trend of the past 12 months, when the industry gained 6.2% while the S&P 500 rose 13.6%,” said Sol Waksman, founder and president of BarclayHedge.

Although returns and cash flow improved in November, the past 12 months have not been so kind. Industry outflows totaled $21.2 billion (1.2% of assets) from December 2011 through November 2012, a sharp reversal compared with the previous 12-month industry inflow of $61.9 billion. TrimTabs and BarclayHedge reported that while the industry lost assets last year, top-performing hedge funds continued to gain assets over the same time period.

Of the 13 hedge fund categories traced by BarclayHedge, emerging markets funds performed best in November, gaining 1.3%. Distressed securities funds had the best 12-month returns, gaining 10.0%.

TrimTabs/Barclay also polled 60 hedge fund managers and found they “overwhelmingly” expect the S&P 500 to rise in 2013 but few expect it to reach last year's heights. Managers  expect financial and industrial stocks to be the top two sectors this year.

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