Hedge Fund Assets Nearing All-Time Pre-Recession Highs

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BarclayHedge and TrimTabs Investment Research announced Tuesday in a report that the hedge fund industry took in $18.4 billion in August. This marks the highest inflow in three months and signaled a strong rebound from redemptions of $750 million in July.

Meanwhile, hedge funds underperformed against the S&P 500 while they kept growing assets. The monthly Hedge Fund Flow Report from TrimTabs and BarclayHedge noted that the Barclay Hedge Fund Index gained 1.2% in August. This underperformed the S&P 500 which gained a 3.8% for the month. Over the past 12 months the Barclay Hedge Fund Index returned 10.3% compared to the S&P 500 which gained 25.2%.

The industry assets rose to a six-year high of $2.38 trillion in August, according to estimates. Assets increased 19.5% in the past 12 months but are only 2.6% lower than the all-time high of $2.44 trillion in June 2008.

BarclayHedge’s report said,

“Hedge fund inflows this year are the strongest we’ve seen since the financial crisis. The industry took in $99.0 billion in the first eight months of 2014, more than double the inflow of $47.5 billion in the same period last year… Sector Specific funds delivered the best returns in August, gaining 2.6%, while Multi-Strategy funds had the strongest inflows at $4.4 billion.”

BarclayHedge further noted that investors are shunning Macro funds, which have had the most redemptions year to date.

The monthly TrimTabs/BarclayHedge Survey of Hedge Fund Managers found no consensus on U.S. stocks. In September’s survey, 37.4% of respondents were neutral on the S&P 500 over the next 30 days, 32.3% were bullish and the remaining 30.3% were bearish. Optimism on the U.S. Dollar Index rose to all-time highs, while pessimism on the 10-year Treasury notes had more than doubled. Hedge fund managers became more bearish on gold and oil prices.