Fixed Income Arbitrage Leads Q1 2003 Hedge Fund Returns

May 22, 2003 ( - Pulling back from their fourth-quarter 2002 behavior, investors poured nearly $7 billion in net assets into hedge funds, according to Tremont's TASS Research.

Leaders during the quarter, which added $6.98 billion in net assets, were Fixed Income Arbitrage with $3.37 billion in assets followed by Managed Futures and Global Macro with net flows of $2.1 billion and $1.73 billion, respectively. According to TASS Research, Fixed Income Arbitrage also benefited from the launch of several high profile funds.   Many of the new funds are based in Europe where conditions are conducive for trading in an array of global bond and futures markets

On the other side of the fence were three categories still reflecting outflows: Event Driven, losing a net $2.09 billion and Long/Short Equity with a $721 million loss.   The Dedicated Short Bias category also recorded a net loss of $58 million.

In the fourth quarter of 2002, hedge funds posted a loss in net assets of $696 million.   For 2002, the industry showed a net gain of $16.28 billion.

The TASS Research quarterly analysis of hedge fund flows is based on an analysis of approximately $350 billion in hedge fund assets.   The TASS Asset Flows Report for the first quarter is available through .