Net flows into hedge funds are almost flat, with at least one index showing negative flows in Septemberthe first time in nearly a year that the hedge fund industry posted negative growth.
The GlobeOp Capital Movement Index, which tracks assets of hedge fund administration clients of GlobeOp, advanced just 0.31% in October, compared to 2.27% in September. A statement from Eurekahedge, citing data from the Eurekahedge Hedge Fund Index, meanwhile, suggested inflows were negative: Early reports indicate negative net flows to hedge funds [in September] for the first time since November 2010.
Despite the slowdown, industry participants say the numbers still depict the health of the hedge fund industry. Hedge fund investors remain committed, says Hans Hufschmid, CEO of GlobeOp. After a double-digit decline in equities over the quarter, alternative investments continue to hold their attraction.
Hedge funds usually see greater inflows during market declines as alternative investments tend to outperform equities, even in tumultuous markets.
The Eurekahedge index, for instance, outperformed global markets by nearly 7.7% in September. The index was down 2.3% on the month versus a 10% drop on the MSCI World Index.
Eurekahedge says nearly one-third of the hedge funds tracked by its index reported positive returns for the month.
(CG)