Hedge Fund Investors Prefer Equities To Credit In January

Feb 21 2014 | 9:12am ET

Hedge fund investors favored equity over credit in January for the fourth consecutive month, according to new research from data provider eVestment.

Asset flows between the two strategies deviated by the widest margin since pre-financial crisis in Q2 2007, as investors poured $13.8 billion into equities in January while redeeming $7.3 billion from credit strategies.

Overall, investors added about $4.9 billion to hedge funds in January, but performance losses of $12.8 billion resulted in a 0.3% decline in total industry assets under management, which stood at $2.85 trillion.

Winning strategies, in terms of attracting assets, in January included long/short equity ($8.45 billion), event-driven ($5.73 billion), broad multi-strategy ($4.68 billion), distressed ($0.43 billion) and market neutral ($0.13 billion).

Losing strategies included directional credit (which lost $0.16 billion), convertible arbitrage (down $0.32 billion), MBS strategies (down $1.17 billion), relative value credit (down $3.98 billion), macro (down $4.70 billion) and, the biggest loser in January, managed futures (down $5.06 billion).

By region, funds focused on the Americas gained $1.64 billion, Europe funds gained $4.46 billion, Asian funds lost $0.03 billion and global funds lost $1.13 billion. Emerging markets funds saw investors redeem $2.30 billion.


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