This is Money – Institutional investors are still running scared from hedge funds after last year’s bloodbath, figures from sector giant Man Group show.

They pulled a net £2bn from Man Group in the first quarter of its financial year. Confidence in hedge funds has been rocked by their poor performance of late.

Keith Baird, analyst at Oriel Securities, said 2008 destroyed the entire theory of hedge funds ability to produce positive returns in any market. He said: ‘The illusion was shattered.’

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Tags: baird, bloodbath, confidence, first quarter, giant-man, group show, hedge funds, illusion, institutional-investors, man-group, money, oriel securities, poor-performance

Bloomberg – Companies with the most debt and lowest returns on assets are turning the biggest six-week rally in stocks since 1938 into a bloodbath for last year’s best- performing trading strategy.

Investors in so-called quantitative momentum funds — which speculate that the worst stocks in the past 12 months will continue to decline — have become this year’s biggest losers after banks and companies that rely on consumer spending surged. Quant momentum managers may have tumbled 27 percent this month in the U.S., the most since at least 1993, while those in Europe may have lost 20 percent in March and 24 percent in April, according to data compiled by JPMorgan Chase & Co.

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Tags: 12 months, amp, assets, banks, biggest losers, bloodbath, consumer spending, europe, investors, jpmorgan chase, momentum, rally, stocks, trading strategy