MSN MoneyCentral – Hedge funds attracted $42.1 billion in new cash in the second quarter of 2006, bringing total industry assets to $1.225 trillion.
The inflow was the largest quarterly gain since 2003, when Chicago-based Hedge Fund Research began tracking quarterly flow data.
“We have seen historically that flows tend to follow performance, and the first quarter of 2006, along with the first part of the second quarter, was one of the strongest the industry has seen for years,” HFR president Joshua Rosenberg said.
Performance for the period was nearly flat, with the HFRI Composite Index — which is an equal-weighted return of all funds in the individual strategy and sector indexes compiled by HFR — up just 0.2 percent compared with 6 percent in the first quarter.
