Lonsec has released its annual single manager hedge funds sector review, assigning four funds out of 16 with its highest rating.
The four hedge funds that received Lonsec’s “highly recommended” rating included the BlackRock Scientific Global Markets Fund, Aspect Diversified Futures Fund, the Man AHL Alpha Fund and the Winton Global Alpha Fund.
“The distribution of ratings in the 2010 review has a distinct positive skew due to our focus on reviewing a selective list of high quality offerings, rather than just rating a large number of products,” Lonsec senior investment analyst Lin Ngin said.
While retail fund inflows across the range of funds rated in the review have generally been flat, Ngin said managers researched by Lonsec have reported greater interest in hedge fund products from institutional clients.
“Although we have seen signs of life in this sector, with US$13.7 billion of inflows into the global hedge fund industry in the first quarter of 2010, this is still substantially lower than the US$100+ billion per annum in inflows from 2002-07,” he said.
In last year’s review, there were 10 new funds rated, however this year only one new hedge fund – the AQR Delta Fund – was added to Lonsec’s recommended list.
“Not surprisingly, the dearth of new retail offerings is intertwined with the lack of retail inflows,” Ngin said.
“This sector is very prone to flavour of the month products, whether they be new managed futures products in 2009 – this strategy had a very strong 2008 – or commodities-based funds.”
