BarclayHedge and TrimTabs Investment Research have reported that hedge fund investors redeemed $10.8 billion (0.6 per cent of assets) in October, reversing a combined $9.8 billion inflow for August and September. Based on data from 3,040 funds, the report estimated that industry assets stood at $1.8 trillion in October, down 26.1 per cent from the June 2008 peak of $2.4 trillion.

Though the flow picture worsened in October, hedge fund investors reaped a net 0.21 per cent gain in October, while the S&P 500 Index fell 1.98 per cent.

During the past 12 months, the top 10 per cent performing funds took in $4.8 billion and posted a median gain of 23.5 per cent, well ahead of a 15.9 per cent increase in the S&P 500. 

In contrast, the 10 per cent worst-performing hedge funds experienced outflows of $6.3 billion with a median 11.2 per cent loss, underperforming the industry by 1,543 basis points.  The top 40 per cent of hedge fund performers had outflows of $3.0 billion while the bottom 40 per cent saw outflows of $25.2 billion.

TrimTabs and BarclayHedge also reported that the hedge fund industry gained 6.1 per cent year-to-date -while the S&P 500 Index rose 12.3 per cent - and earned 4.2 per cent over the past 12 months while the S&P rose 15.9 per cent.