BarclayHedge Survey: 36% Of Managers Offer Low- or No-Fee Alternatives To Investors

Aug 16 2017 | 5:14pm ET

More than a third of hedge fund managers currently offer reduced or no-fee alternatives to their investors, according to a new survey from BarclayHedge, and a further 20% plan to do so in the next three to six months. 

The survey, conducted by BarclayHedge between July 17 and July 28, received 134 replies from a wide mix of hedge fund managers, the company said in a statement. Fully 36.6% said they already offer lower or zero-fee options to their investors, a figure BarclayHedge said is likely to grow. 

“The hedge fund industry has been under pressure to offer lower fee alternatives for some time,” said Sol Waksman, founder of BarclayHedge, in the statement. “We expect that these pressures will continue and that low or no fee products will continue to grow."

The company’s monthly survey also revealed market-related expectations amongst respondents. Highlights from BarclayHedge’s statement regarding the July survey:

  • U.S. equity market neutral sentiment continued to climb and at 45.9% is at the highest levels since April 2014. Both bullish and bearish opinions fell, but the greatest change has come with bearish sentiment, which was 23.9% in July after being at 45.9% just 4 months ago.
  • Managers maintain a neutral stance on 10-Year U.S. Treasuries, at 48.1%, but bearish sentiment has been rising, hitting 29.8% in July after a low of 14.9% in May.
  • There has been little change in U.S. Dollar Index expectations, as neutral sentiment predominates at 52.0%. Bullish opinions, which were as high as 60% in November, remain in the low range at 23.5%.
  • Managers continue to favor equities as the asset class most likely to outperform, leading asset classes at 50% and getting back to levels last seen in January 2017. Sentiment for Short Term Bonds shifted from 25.5% to 9.4% in June and Long Term Bonds fell slightly as well. Precious Metals rose 9.9% to 29.3 from June, well within the recent bounds of sentiment.
  • Confidence in Developed Markets fell to the lowest level since February 2013, but still remain above 50%. Frontier Markets dipped slightly while Emerging Markets rose 9.3% to 38.9%.
  • Negative sentiment for Gold of 14.8% is near five-year lows for the survey.
  • Sentiment for Oil stayed within recent bounds with bullish and bearish opinions in close proximity. Over the past several months, however, neutral opinion has waned (47.6% in April to 34.3% in July) as negative opinions have grown (from 23.8% to 34.3% in the same period).

BarclayHedge provides research-based information services to the alternative investment industry. Founded in 1985, the company currently maintains data on more than 6,600 hedge funds, fund of funds, and CTAs, and its products and indices are utilized by institutional investors, brokerage firms, and private banks worldwide as performance benchmarks for the hedge fund and managed futures industries.

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