For the best performing hedge funds, look to Asia.
The regions hedge funds are besting several local
equity indexes, with managers in some countries delivering
double-digit returns over the first half of 2017, according to
a statement Friday from industry data
India-focused funds led the pack, gaining 26.6 percent over
the first six months of the year and outperforming the
countrys Sensex 30 index by 1000 basis points. Chinese
hedge funds also beat local stock markets, returning 16.2
percent this year through June more than 1300 basis
points higher than Chinese equities.
For the second consecutive quarter, Asian hedge fund
performance was led by exposures to India and China, HFR
president Kenneth Heinz said in the statement. As
investor concerns over the geopolitical tension in North Korea
rises and the attention toward currency trade policies
increases, funds that strategically position for these events
are likely to lead Asian hedge fund industry performance in the
second half of 2017.
Hedge funds have been staging a comeback after years of
criticism about poor performance and high fees. During the
second quarter, investors put more money into hedge funds than
they took out as allocations outweighed redemptions for the
first time since the third quarter of 2015, according to
[II Deep Dive: Investors Are Putting Money in Hedge Funds
Asian hedge funds as a whole excluding Japanese funds
were up 15 percent in the first half of the year,
according to HFRs emerging markets benchmark.
Japan-focused hedge funds gained 6.8 percent over the six-month
period, beating the Nikkei 225 by roughly 200 basis points.
Asia-focused hedge funds also far outperformed their peers
globally: the $3.1 trillion industry returned less than 5 percent on average
over the first half of the year. But with assets under
management climbing to $117.1 billion at the end of June,
Asia-focused funds represent just a small portion of the
Asias hedge-fund industry may benefit from rising
interest from Asian-Pacific investors. A Preqin report last week said institutional
investors based in the region allocated about $200 billion to
hedge funds last year, up from $180 billion in 2015. More than
half of this capital came from sovereign wealth funds, with the
China Investment Corporation alone accounting for an estimated