Hedge Funds Get Large Outflows, Fund Managers Growing More Bearish

Today’s data from TrimTabs showed that hedge funds redeemed some $5.1 billion in April 2012, and that would make a net outflow of $12.7 billion that flowed out of hedge funds over the 12 prior 12-month period.  The only good news here is that a more recent hedge fund survey from late in May showed that hedge fund managers were the most bearish on the S&P 500 Index than they had been in six months.

The May 2012 TrimTabs/BarclayHedge Survey of Hedge Fund Managers found that 35.6% of managers were bearish on the S&P 500 for June, while 30.5% were bullish, and 33.9% were neutral. Meanwhile, the bullish sentiment on the U.S. Dollar Index surged to 61.9% in May from 35.4% in April.

Here is an interesting take on QE3: over 28% of managers saw more than a 60% chance of the Federal Reserve launching another round of quantitative easing this year, while over 47% of managers saw less than a 40% likelihood.  Dan Dorfman commented that QE3 could be a Wall Street mirage on the TrimTabs blog.

JON C. OGG