January’s upbeat performance has lowered client exits from hedge funds to a record low. Outflows were just 0.53%, while the GlobeOp Capital Movement Index jumped to its highest since 2008; 142.6 points.
“It could be well that in a zero interest rate environment and a challenging equity market, a diversified portfolio of hedge fund investments is becoming an ever-attractive alternative,” GlobeOp’s Hans Hufschmid. He added that “Investors remain committed to the hedge fund sector” despite last year’s disappointment.
According to Hedge Fund Research, the average loss of a hedge fund was 5.2% in 2011. This January funds gained 2.6% as markets rebounded. GlobeOp revealed that client fund net inflows increased to 2.25% in February.
The hedge fund industry as a whole benefitted from a 10% jump in the Europ-ean banking sector, thanks to the 489 billion euros given to banks by the European Central Bank. The funds are inexpensive, with a long-term guarantee.