Dry bulk shipping - one of the hardest hit parts of the industry is expected to see better prospects as fleet growth slows and an expected pickup in demand for commodities such as coal, iron ore and grains bolster employment for bulker vessels.
By contrast, oil tankers are likely to see tougher times for now with weak freight rates hitting bottom lines of operators. Hedge fund ownership of Nordic American Tanker (NAT.N), which ships oil, for example, rose to 27 percent at year-end, from 2.4 percent at end-September, according to the data from Symmetric, which tracks investment funds. Data for earlier periods was not immediately available.
And ownership by hedge funds of Dryships Inc (DRYS.O), which is active in dry bulk, tanker and offshore shipping markets, meanwhile, rose to 80 percent, from 10.3 percent.
Hedge funds had invested $308 million (218.97 million pounds) in Kirby Corp (KEX.N), $26 million in Nordic American Tanker and $9 million in Dryships.
Dry bulk firm Golden Ocean (GOGL.O) and oil transporter Teekay Tankers (TNK.N) were also popular as well as Ship Finance International (SFL.N), which has a diversified fleet, the data showed.
Funds had also invested $35 million to their holdings of Golden Ocean and $77 million in Ship Finance International.
Greywolf Capital Management, which initially invested in Tanker Investment before it merged with Teekay Tankers, is now among the hedge funds holding a combined $39 million in Teekay stock, and is bullish for the sector's prospects.
"We're starting to see fundamental improvement in many shipping markets with rates moving up, not because of temporary events, but rather as a result of a true balancing of supply and demand," a spokesman for Greywolf said.
"With global growth accelerating, this an industry we continue to focus on and that should deliver highly attractive returns in the coming years."
Some hedge funds have started moving into liquefied natural gas (LNG) tanker stocks, investing $4 million in Dynagas LNG Partners (DLNG.N), and $62 million in Golar LNG Partners (GMLP.O) after pulling back from the sector in the preceding three months.
Although other investors pulled back from LNG stocks, a pick up in transport demand has helped the outlook for vessel owners in the LNG sector.