The most recent BarclayHedge report shows hedge funds took in $17.5bn (€12.9bn) in November – the biggest inflow in six months, and the second-biggest of the past two years.
The inflow took total net hedge fund sales to $66.9bn for the first 11 months of 2013, and boosted industry assets to a five-year high of $2.1trn.
These findings were echoed by research from data provider eVestment, which shows that 2013 was the strongest year for hedge funds in the past three. It found that returns had been driven by equity strategies, which were supported by buoyant stock markets.
Equity approaches delivered returns two times higher than those of credit strategies, and nearly three times greater than those of funds with diversified exposure.
BarclayHedge similarly found equity-biased funds in the ascendancy. Equity long-bias funds were up on average 21.45% over 2013, with only niche sectors such as healthcare and biotechnology, and Pacific Rim equities delivering stronger returns.
Equity short-bias strategies fared worst over the period, but commodities-focused funds also performed poorly. This was reflected in fund flows, with $2.7bn exiting CTA funds in November, up from $756m in October.
Funds of hedge funds reversed their recent run of unpopularity, adding $1.9bn in November, compared with October’s $1.1bn outflow.
As Expert Investor Europe reported last month, Deutsche Bank expects hedge funds to become bigger players in long-only asset management in the years ahead.