Despite doing better last month than most of their peers globally, with a +0.14% gain, Asia ex-Japan hedge funds were down -3.13% for the six months to June 30, according to Singapore research firm Eurekahedge.

That's the worst first-half performance among Eurekahedge's regional hedge-fund indices, and well down on the global index, which was virtually flat, at
-0.02%.

However, US-based Hedge Fund Research Inc had Latin America funds as the worst performers, at -3.67%, followed by Asia ex-Japan funds, at
-2.41%. (There was a major divergence between HFR's and Eurekahedge's Latin America indices, with the latter posting a +1.47% gain.)

Globally, performance was very slightly down, at -0.18%, according to the HFRI Fund Weighted Composite Index.

These figures are in stark contrast to blockbuster figures for 2009 of +38.11% for Asia ex-Japan funds and +19.63% for global funds, according to Eurekahedge.

Both firms agree that long/short equity hedge was the worst-performing strategy for the first half, with Eurekahedge reporting a loss of -1.75% and HFR -1.60%. Funds of funds are also suffering, at -1.11% (Eurekahedge) and -1.08% (HFR).

Of course, such figures don't seem quite so dire when compared to a first-half decline of -10.88% for the MSCI World Index, following a drop of -3.56% in June.

Meanwhile, the best performers for the year so far are distressed-debt and fixed-income funds, with gains of +6.42% and +3.73%, according to Eurekahedge.

(Eurekahedge's figures are based on 51.52% of the funds reporting their NAV for June as at July 13.)

Despite their current troubles, Asia-based managers may take some comfort from the knowledge that they probably performed better than the Asia-focused managers based outside the region, according to Singapore-based GFIA.

The research firm published results last week of a study of the relationship between a hedge-fund manager's location, and his or her fund's performance. It found that Asia-based managers in aggregate provide higher returns compared with non-Asia based managers running similar strategies, since at least September 2004.

Peter Douglas, principal of GFIA, says: "We are firmly convinced that, while there are some very good Asian managers based outside the region, generally they're handicapped in their return potential compared with indigenous managers. We therefore focus our research effort almost exclusively on managers running their strategy from within the region."

One effect of this perennial outperformance is the increasing dominance of the Hong Kong/Singapore nexus as the centre of the Asian hedge fund industry, adds GFIA, at the expense of the US and Europe.