By Manuela Badawy and Sam Forgione
NEW YORK (Reuters) - Hedge funds lost $5.1 billion to outflows in April, reversing inflows of $2.8 billon in March, as persisting uncertainty in the euro zone affected investors worldwide.
The outflows amount to 0.3 percent of total industry assets, which increased 1.6 percent for the first four months of 2012 to an estimated $1.7 trillion, the research firm said.
Hedge funds fell 0.59 percent in April but outperformed the S&P 500's <.SPX> 0.75 percent drop, marking the first time in six months that the industry outperformed that benchmark, BarclayHedge founder and President Sol Waksman said.
Still, the industry's 5 percent gain for the first four months trailed the S&P 500's 11.2 percent gain over that period, the research firm added.
The 3,042 hedge funds reviewed had net outflows of more than $12.7 billion between May 2011 and April 2012, with outflows reported in six of those 12 months. That is a shift from the previous 12 months, when the funds had net inflows of $90.7 billion and only three monthly outflows, Waksman said.
For the 12 months ended April, fixed income, multi-strategy and macro funds attracted the largest cash inflows among the 13 fund categories tracked. Fixed-income funds had $15.1 billion in inflows, multi-strategy had $13.4 billion, and macro funds had $7.8 billion, the report said.
The report added that among 120 hedge fund managers, 35.6 percent were bearish on the S&P 500 for June according to a late May study, while 30.5 percent were bullish and 33.9 percent were neutral. That figure for bearishness is a six-month high, while the bullishness figure is an eight-month low.
"The hedge funds' bearish sentiment is reflective of a strong rally in equity markets to start the year, and now hedge fund managers are anticipating a pullback because of the European sovereign debt crisis and less rosy U.S. economic outlook," said Leon Mirochnik, a financial analyst at TrimTabs.
The U.S. Dollar Index surged to a 15-month high to reach 61.9 percent in May from 35.4 percent in April as concern over the euro zone sovereign debt crisis punished the euro and boosted demand for the dollar, the survey showed.
In addition, more than 28 percent of the surveyed managers saw more than a 60 percent chance that the Federal Reserve would launch another round of quantitative easing this year, while over 47 percent of managers saw less than a 40 percent likelihood of that happening.
(Reporting by Samuel Forgione and Manuela Badawy; Editing by Steve Orlofsky)
