Hedge Fund Investors October
Hedge Fund Investors Pull Back $11 Billion in October
In October, hedge funds investors pulled back more money than in the last two years. The diving stock market and investors fears about the current European sovereign debt problem led many hedge fund investors to withdraw from funds, totaling $11 billion in October according to recent data.
The redemptions represent just under 1% of assets in the industry, fund tracker Trim Tabs said in its report. The company released its findings based on 2,900 hedge funds. "Investors seem to be fed up with lackluster hedge fund returns," Trim Tabs said.
Indeed, the S&P 500 Index is up only 1% this year through the end of November, although the market posted big gains yesterday. For example, the Dow Jones Industrial Average is coming off its biggest one-day gain since March 23, 2009, fueled by news that a global effort to make it less costly for European banks to borrow U.S. dollars. The Dow has added 814 points over the past three sessions.
But a few days does not a rally make. Trim Tabs said funds of hedge funds shed $2.7 billion (1% of assets) in October. Hedge funds overall have taken in $103 billion since the start of 2010, while funds of funds have shed $20 billion.
Hedge fund assets, at $1.6 trillion at the end of November, are at their lowest since the beginning of 2010, "in part because of performance," Trim Tabs said. Source
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