The holiday season was particulary cheerful for the investing crowd, as the number of bullish investors rose to a three-year high. The Wall Street Journal reports that the ratio of bullish individuals rose from 47.5% in the pre-holiday week to 55.1% in this week, according to data from American Association of Individual Investors.
Bullish sentiment on the rise
Furthermore, the number of bullish investors on average for every week of 2013 is also higher than historical data. On average 39.7% of investors said they were bullish in 2013 compared to historical yearly average of 38.1%. Considering the fact that many stock market indices broke previous records this year, and market caps of a few companies ballooned to unexplainable levels, it is not a surprise that investors are ending 2013 in a celebratory fashion. The Dow Jones Industrial Average (INDEXDJX:.DJI) is set to end the year with its best rally since 2003 whereas the S&P 500 (INDEXSP:.INX) is looking at closing out the year with its highest level since 1997.
Hedge funds in green
Meanwhile hedge funds are also ending the year in the green, if not in terms of returns then at least in terms of assets. All major hedge fund data collectors are seeing a surge in assets this year. Hedge Fund Research points out that total assets of the industry are now up to $2.5 trillion, beating the pre-crisis peak of $1.7 trillion by a wide margin. Eurekahedge estimated total assets of the industry at $1.99 trillion by the end of November. With these level of assets, hedge funds beat the previous record of $1.95 trillion that they achieved in June 2008, says Eurekahedge.
Data from eVestment tells a similar story: after November, total assets of the industry stood at $2.84 trillion, just shy of the $2.93 trillion that the industry recorded in pre-crisis times. Meanwhile net inflows for the year have broken records at Eurekahedge, which were up to $127 billion at the end of November.
We have already established that whatever the commentators say about hedge fund performance, their investors are satisfied overall with what they are delivered. As per the results of a Preqin survey, the level of satisfaction of institutional investors with their money managers is at a record high in 2013. Among the 148 respondents with $60 billion invested in such funds, only 16% said that hedge funds had not met their performance expectations, whereas 63% said their needs had been met and 21% were of the opinion that their manager’s performance had exceeded expectations.
So all in all, not a bad year.