China hedge funds in the spotlight, topping charts

While globally most hedge funds saw performance declines, China-focused hedge funds were leading the industry in October with gains of 18.45% for the year-to-date, according to performance figures collected by eVestment. The performance of a number of China equity-focused hedge funds has been chart topping in recent months. Most notably there is Marshall Wace’s MW TOPS China UCITS fund, which for the year-to-date through November 11 is up over 56%. The Pinpoint China Fund was up 40.11% through mid-October, according to HSBC figures. This is as HFR’s HFRI Emerging Market China Index was up 15.32% through October. For the month, however, China-focused strategies were up only 0.21%, while hedge funds generally were down 0.21%, according to eVestment. Brazil funds, meanwhile, had the worst YTD performance with losses of -24.9% as eVestment said that Latin America funds struggled broadly as well. Not since 2015, have Brazil-focused funds declined as much. Five years ago, these funds lost an average of more than -30%. The overall hedge fund industry’s return YTD of 0.74% is in stark contrast to the 10.05% return the industry put up for all of 2019, according to eVestment research. "Hedge fund performance is a difficult topic to apply broad statements of success or underperformance," Peter Laurelli, eVestment global head of research, said. "Within every strategy there are managers at either end of the spectrum. The most important takeaway for investors is to understand why for each individual manager their approach and methodologies are either working, or not, in the current environment and whether that result is a near-term aberration or longer-term issue with how those philosophies fit into current market dynamics." Globally, roughly half (47%) of hedge funds produced positive results in October. The subcategories of Equity-Financials and Equity-Healthcare are the groups that produced impressive gains last month, returning 2.95% and 2.23% in October. Equity-Technology is up 13.75% YTD, but for the month was only up 0.61%. Overall, Laurelli noted that many funds are still doing quite well and making their investors very happy.

China hedge funds in the spotlight, topping charts

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