Asian Hedge Funds Rebounded In March But Sector Still Under Water

Tom Burroughes

9 May 2016

Asian hedge funds gained in March to conclude a volatile first quarter of the year, narrowing losses across all Asian regions and strategies from earlier in the quarter, according to data from .

The HFRX Japan Index gained 3.1 per cent in March, leaving it down -1.9 per cent for the year, though topping the Nikkei 225 as the Japanese yen continued to surge against the dollar. Total Asian hedge fund capital declined to $111.9 billion, which is the lowest level since the third quarter of 2013, data showed.

Total hedge fund capital globally declined to $2.85 trillion, as reported in the HFR Global Hedge Fund Industry Report, released last month.

The HFRI China Index rose 6.1 per cent in March, narrowing the 2016 decline to -5.9 per cent, while topping the Shanghai Composite by over 900 basis points. The HFRI India Index gained 11.8 per cent in March, the strongest monthly performance since January 2012 and third highest since its inception. This narrowed the 2016 decline to -6.0 per cent. The HFRI Asia ex-Japan Index rose 6.9 per cent in March, the strongest monthly gain since May 2009, when it was up 10.3 per cent.

Asian hedge funds executing macro hedge fund strategies, which invest long and short across currency, commodity, fixed income and equity markets using both quantitative and fundamental strategies, led performance with a 3.0 per cent return in the first quarter.

Total Asian hedge fund capital has declined in two of the last three quarters since peaking at $126.3 billion last year.