Gwyn Roberts

14/09/2011 Author: Gwyn Roberts

Editor's view: 14 September 2011

August may have been a bleak month, but so far the faith of investors hasn’t waned. This week’s GlobeOp inflow data and a recent BarclayHedge survey reveal that an industry not blessed with shoot-the-lights-out performance YTD is still managing to secure positive flows.

This is good news, but should also give us all a sense of perspective. The markets have been abysmal but investors – at least those of an institutional stripe – were never going to up-sticks and plunge for the exits, despite some wild speculation. In fact, the better funds have received investor capital even in the normally quiet summer months.

Judging HFMWeek’s US Performance Awards last week only served to emphasise the professional sheen of the sector’s top tier. This year has been unkind, but the managers who made our shortlists not only out-performed up to the close of June (the end of our judging period), but continued to do so through August and early-September. Some, like the evergreen Millennium, are doing so well that many of their products will be closed to new investors by the end of 2011.   

Investors aren’t flighty, but they are careful. The ‘new investor’ – often just the ‘old investor’, but with better advice – isn’t treating the industry as a ‘get rich quick’ scheme or an ATM, but is studiously allocating to best-of-breed. This means that, while Izzy Englander et al will accrue new capital as tested and verified protectors of wealth, the rest still have a fight on their hands, despite continued inflows.

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