The most recent BarclayHedge report shows hedge funds took in $1.75bn in November, the second highest inflow of the past two years and a reversal of the $2.2bn in redemptions in October.
The hedge fund industry has taken in a net $67bn in 2013 with industry assets climbing to a five-year high of $2trn in November.
These findings are echoed by research from eVestment, which shows that 2013 was the best year for hedge funds in the last three. It found that returns had been driven by equity strategies, which were supported by buoyant equity markets. Equity strategies delivered two times higher than credit strategies and nearly three times more than funds with exposure across diversified markets.
The BarclayHedge survey also found equity-biased funds in the ascendancy. Equity long bias funds are up an average of 21.45% over 2013, with only niche sectors such as healthcare and biotechnology, and Pacific Rim equities delivering stronger returns. Equity short-biased strategies have fared worst over the period, but commodities-focused strategies performed badly as well. This was reflected in fund flows, with $2.7bn exiting CTA funds in November, up from $756m in October.
Funds of hedge funds reversed their recent run of unpopularity, adding $1.9 billion in November, and reversing October’s $1.1bn outflow.
The average return for the 2,807 hedge funds (ex. FoFs) monitored by the BarclayHedge report is +0.77%; the Index is up +9.89% year to date. This is approximately in line with the FTSE 100 over the same period.
