NEW YORK (CNNMoney.com) -- Hedge funds attracted $42 billion of new money in the second quarter, the largest quarterly spike in new assets since 2003, according to an industry tracker.

That brings the total assets invested in hedge funds up to $1.225 trillion, according to Chicago-based hedge fund tracker Hedge Fund Research, which conducted the survey of asset flows.

Hedge funds are private investment partnerships limited to institutional investors and wealthy individuals. Hedge funds use a variety of strategies, from betting on or against stocks, currencies or commodities to more esoteric strategies involving "derivative" investments or turning around distressed companies.

While hedge fund performance this year has been disappointing to some, the funds have outperformed many major market indices. For the year, hedge funds have posted gains of 6.16, according to the HFRI Composite Index. Hedge fund performance can be difficult to track, because the funds are private and are not required to report their performance. Thus, different hedge fund indexes will report different results.

By contrast, the S&P 500 is up 0.92 percent for the year to date, while the MSCI World Index is up 2.17 percent.

Equity hedge funds gained the most assets, garnering $13 billion in new investments in the second quarter, according to HFR. Global macro funds, which invest in currencies and other instruments in markets around the world, gained $8.4 billion in new money. Fixed income arbitrage funds posted the biggest outflows, losing $164 million in the quarter.

For the quarter, hedge funds are flat, according to the HFRI Index. The top performing hedge fund category for the quarter was short selling, with an average return of 4.17 percent, reflecting the tough market environment during the quarter. Short selling funds are up 2.30 percent for the year, according to HFR.

Equity non-hedge performed worst, posting a 2.94 percent decline for the quarter, according to HFR. The strategy is up 5.07 percent for the year.

Related: Worst of the worst of the worst