It may be beneficial for financial experts, and for
investors and their money managers, to track hedge fund trends regularly. While
the up and down nature of the financial market (even the hedge fund market,
which promises absolute returns), it can be incredibly useful to analyze trends
and attempt to see what will be happening in the future. The issue with trends,
of course, is that they come and go, and with sometimes volatile hedge funds,
they can do so very quickly. Still, here is a brief look at some of the most
recent trends in the hedge fund market, looking specifically at the first
quarter of 2012.
By the nature of tracking trends, we must look back into
2011 to see what has changed – and what has carried over – from then. The most
noticeable carry-over is the fact that bigger hedge fund investments seem to be
doing the best. Smaller hedge funds are not seeing the same large returns, and
in some cases may not be breaking even. Along with the continued asset rising
of large funds, one of the trends that are noticeable in the first quarter of
2012 is the fact that hedge funds themselves are increasing. During the first
three months of the new year alone, hedge funds increased by an average of over
four and a half percent.
Another trend that experts are keeping their eyes on is the
fact that global investing is coming out on top. Emerging markets seem to be
the place to invest, now, and it shows no signs of changing any time soon. Global
funds saw great advances in assets during the first quarter of 2012 for sure.
Going back to performance in 2011 having an impact on 2012,
it seems as though much of the positive performance seen now can be attributed
to 2011. Net flow from 2011 that went to large funds made up one hundred and
thirty-six percent.
While there have definitely been some “highs” in the trends
of 2012 (and 2011), the fact is it wouldn’t be the investment market without a
few lows. There have been some significant issues with some major hedge fund
players; Paulson & Co has been having difficulty, and fell in 2001 from a
summer month thirty-five billion (and change) to around twenty-eight billion in
December. Paulson & Co are definitely not the only ones having trouble.
Overall, the beginning of 2012 looks to be promising. With
new capital pouring in to the hedge fund market, and the best performance the
market has seen at the beginning of a year since way back in 2006, it seems as
though hedge funds may be in for a great year. However, it is always important
to keep tracking hedge fund trends, especially the negative ones. The wise
investor or fund manager knows better than to trust calm waters for very long;
things can, as mentioned before, change very quickly, and a complacent hedge
fund is one that will see loss. Typically, hedge funds must be managed
aggressively.
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