Asia-focused hedge funds – especially India and Japan strategies – continued their heavy slide last month, while emerging-market and global mandates made slight gains.
Globally hedge strategies ended the first half with respectable gains, with India funds in particular surging on post-election euphoria. But China and Japan funds have posted falls this year.
Managers across the board pare risk as market uncertainty takes hold, leading to narrow losses among Asia ex-Japan hedge funds.
Poor performance in the third quarter drags down regional hedge fund assets, according to the latest data.
August saw the sector record its worst monthly stats so far this year, further clouding a weak performance in 2011. But research house HFR sees some cause for optimism.
Fewer launches from Asia puts the region behind the global growth rate.
The inflows are linked to positive sentiment on China, strong Indian hedge-fund performance, increased fund-launch and corporate-deal activity, and renewed interest in Japanese funds.
But Hedge Fund Research Inc awards that dubious honour to Latin America funds. Either way, says GFIA, Asia-based hedge funds perform better than their Asia-focused peers outside the region.
In May, Asia hedge funds suffered their biggest drop since October 2008, according to both Eurekahedge and Hedge Fund Research. Adding to managers' woes globally have been liquidations and outflows.