Hedge funds topped mutual funds in equity trading volume last year and are now second only to asset management shops, according to a new study by Greenwich Associates.
Although the second half of 2007 was something of a wild ride, hedge fund performance for the year was relatively strong, and from a U.S. equity trading perspective, hedge funds were extremely active, said Greenwich Associates Consultant John Feng.
He said approximately 30% of U.S. institutional equity commission payments were generated by hedge funds, up from 24% the previous year. In contrast, mutual fund commission payments continued their 10% fall the previous year to another decline of 19%.
Hedge funds influence in generating equity trading has helped firms like Merrill Lynch solidify their standing as top U.S. brokers by market share.