Asia ex-Japan hedge funds have posted the strongest performance worldwide this year, data from research house Eurekahedge shows.
Hedge funds invested in the region are up 7.26 percent year to date, attributing most of their gains to Indian equities, which have risen nearly 27 percent amid optimism surrounding the new government led by Narendra Modi. Hedge funds that invested in India specifically gained around 26 percent year to date, the Eurekahedge report published Tuesday showed.
Funds with a Latin American mandate came in second place, up 5.93 percent. These funds were the star performers during August, returning 2.2 percent for the month. Those that invested in Brazil did especially well as the nation’s stock market rallied sharply in anticipation of upcoming elections.
Polls showing that opposition candidate Marina Silva is gaining ground over incumbent President Dilma Rousseff helped push the Brazilian equity index 17.24 percent higher so far this year as investors grow bullish over the prospect of a new government that can turn around the nation’s economic fortunes.
North American funds also saw strong gains, up 1.68 percent in August and 5.63 percent year to date, amid improved sentiment surrounding the US economic recovery.
European hedge funds, meanwhile, rose a mere 0.34 percent in August and 1.41 percent year to date, amid weak growth, low inflation and geopolitical tensions in Ukraine.
Russian hedge funds also took a battering in August; Eurekahedge’s Russian RTS Stock index declined 2.39 percent as relations between Russia and the international community continued to sour.
Japan-focused funds also lagged, rising only 0.76 percent in August but outperforming the Nikkei which lost 1.26 percent.
Overall, global hedge funds are up 4.16 percent so far in 2014, registering USD 52.2 billion in performance-based gains, and seeing net asset inflows of USD 70.9 billion.
Assets under management for UCITs hedge funds – funds that comply with the European Directive for retail open-ended investment funds – reached a record high in August of USD 275.2 billion.
Strategy wise, long/short equity funds were the most popular in terms of capital raised, attracting net asset inflows of USD 60 billion, following by USD 16 billion for fixed income and USD 13 billion for even driven strategies.