New York (HedgeCo.Net) – The hedge fund industry redeemed $5.1 billion (0.2% of assets) in September, BarclayHedge and TrimTabs Investment Research reports, making it the largest outflow since December 2013 and only the second outflow this year.

“Hedge fund inflows slowed sharply in the third quarter,” said Sol Waksman, president and founder of BarclayHedge. “The industry raked in $82.1 billion in the first half of 2014 — more than in the previous three years combined — but inflows subsided to $12.6 billion in the third quarter.”

Industry assets stood at a six-year high of $2.38 trillion in September, according to estimates based on data from 3,490 funds. Assets climbed 18.8% in the past 12 months and are down just 2.4% from the all-time high of $2.44 trillion in June 2008.

The monthly TrimTabs/BarclayHedge Hedge Fund Flow Report noted that the hedge fund industry lost 1.3% in September, the worst return in 15 months, but it outperformed the S&P 500, which lost 1.4%. In the past 12 months, hedge funds returned 10.3%, while the S&P 500 gained 19.7%.

“Macro funds performed best in September, gaining 1.2%, while Distressed Securities funds had the strongest inflows at $1.7 billion,” said Waksman. He also noted that despite superior returns in September, Macro funds have the largest redemptions year-to-date ($6.3 billion) and in the past 12 months ($9.8 billion).

The monthly TrimTabs/BarclayHedge Survey of Hedge Fund Managers finds managers were more optimistic on stocks in October than they had been all year. A majority of respondents expects developed markets to outperform emerging and frontier markets over the next six months, a trend that has persisted for 20 consecutive months. Bullishness on gold fell to its lowest point in 17 months.

Editing by Alex Akesson
For HedgeCo.net
alex@hedgeco.net
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