By Susan Barreto, Alternatives Watch
Asian hedge funds hit a new asset recorded at the end of the first quarter, as many funds were riding high from their 2020 gains.
According to data provider HFR, Asian hedge funds hit a new asset record of $132.6 billion at the end of March. This figure translates into $7 billion in inflows over the first quarter, which follows composite gains of 27% for China-focused funds in 2020.
Overall, these investor moves drove gains in emerging market hedge fund assets to $264.8 billion, as investment gains broadly were reported with funds investing in China, India and the Middle East.
Of the firm’s based in Asia, nearly 40% are based in China within HFR’s database and within the Asian hedge funds the majority (76%) are equity hedge strategies.
According to recent HSBC figures on some of the more well-known China strategies, funds such as Marshall Wace’s MW TOPS China A Shares, Pinpoint’s China Fund and Zeal China that saw gains more than 45% in 2020, have turned negative in the first few months of 2021.
According to HFR’s composite numbers on China funds, the country-focused funds performed better than broad China equity indexes with gains of 7.3% year-to-date through April. Investors in the region have pointed to some key trades within healthcare-oriented stocks in recent months. Of the firm’s based in Asia, nearly 40% are based in China within HFR’s database and within the Asian hedge funds the majority (76%) are equity hedge strategies.
Hedge funds across the board, including in China, have also become active in cryptocurrency trading and the HFR Cryptocurrency Index has been up a whopping 229% for the year-to-date through April.
“As the global economy begins to emerge from the coronavirus pandemic quarantine, strong, powerful hedge fund industry performance and growth trends have dominated early 2020 with emerging markets and Asian hedge funds driving these trends with exposures across commodities, regional equities, fixed income, currencies and cryptocurrencies,” said Kenneth Heinz, president of HFR.
He added that there are expectations for acceleration to continue to increase as institutions around the world position for the opportunity-rich, post-pandemic financial market environment.
“Specialized Asian and EM hedge funds which have positioned for and demonstrated performance generation capabilities in these areas are likely to lead industry growth and expansion in coming quarters,” Heinz commented.