Hedge funds based in Japan
attracted an inflow of 15.4 per cent of assets over the last year, despite losing 4.3 per
cent, according to BarclayHedge and TrimTabs Investment
Research.

“Apparently investors were betting they could capitalise on an
appreciating yen over the past 12 months, but the yen lost 0.9 per cent
against the US dollar in that time period,” said Leon Mirochnik, an analyst at TrimTabs. 

Globally, the size of the hedge fund industry reached $1.8 trillion in total assets
in the end of  March, a gain of $2.3 billion in that month when compared
with February. 

These findings contrast with numbers from Chicago-based Hedge Fund
Research, which said the sector holds a total of $2.13 trillion in
assets (which may be accounted for by a different universe of funds
tracked by this organisation).

The BarclayHedge and TrimTabs figures are based on data from 3,034 funds.

In the first quarter of 2012, there were industry outflows of $3.2
billion. In the same period, fund returns were 5.61 per cent, lagging
the S&P 500 index rise of 12 per cent. 

“Though asset growth rebounded in the summer of 2009, it petered out
in May of 2010 and has been sliding ever since, even as equity market
asset prices remained resilient and surged strongly in Q1 2012,” said
Sol Waksman, founder and president of BarclayHedge.

Two hedge fund investment strategies are attracting more investors,
the firm said.  “Macro and fixed income hedge funds are the only
strategies that have seen sizeable inflows as a percentage of assets
over the past three years,” Mirochnik said.
“Hedge fund investors see these strategies as offering the best defence
against unpredictable geopolitical issues and global expansionary
monetary policies,” he said.

The April 2012 TrimTabs/BarclayHedge Survey of Hedge Fund Managers
found that nearly half the hedge fund managers surveyed believe that
sometime this year the S&P 500 will trade below 1,257, where the
index stood at the end of 2011.