People may have given up too quickly on the idea of the Great Rotation into stocks from bonds.

That idea gained popularity late last year, but some have abandoned it this year.

Now it may gain currency again, because hedge funds that normally specialize in bonds are starting to shift to stocks, as they see fixed-income investments as overvalued now, The Wall Street Journal reports.

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

From 2010 to 2012, fixed-income hedge funds drew in a net $100 billion in cash and generated a 22 percent annual return, according to Hedge Fund Research. Stock funds, on the other hand, saw $6 billion of assets leave and produced 9.5 percent annual returns.

But returns have shifted this year. Stock funds brought home 4 percent through mid-March, compared with just 2.4 percent for fixed-income funds.

"Credit fund managers see an opportunity in the equity space, and they are going there," Hiroshi Harada, head of research at HedgeMark Advisors, a hedge-fund monitoring firm, tells The Journal.

Crescent Capital Group, a $12 billion hedge fund manager that focuses on junk loans and bonds, has lifted its stock holdings to 10 percent of assets from almost zero last autumn, co-founder Mark Attanasio tells The Journal.

Meanwhile a study from SEI and Minard Capital shows that hedge funds have some work to do in satisfying their customers.

"With an increasingly crowded field of competitors, rising institutional demands and a decade of disappointing overall returns, hedge funds are at a critical juncture," Ross Ellis, an SEI vice president, says in a statement.

"Based on what we heard from institutional investors and fund managers, it's time for the industry to make an evolutionary leap in proving its worth to a hungry yet hesitant investor base."

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.