HFR: China hedge funds see 15% YTD gains

Year-to-date investment gains continue to swell into the fourth quarter for China funds that returned 15% through October, according to HFR’s latest reported figures. Hedge fund capital in emerging markets strategies also reached a new record thanks to gains in regional equity indexes and surging cryptocurrencies. 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. HFR estimates that total emerging markets hedge fund assets also grew to $251.7 billion at the end of the third quarter, with the dominant currencies being the Chinese Renminbi, Brazilian Real, Indian Rupee, Russian Ruble and Saudi Riyal. Total capital invested in Asian hedge funds increased to $120.5 billion (Chinese RMB 0.8 trillion, Japanese Yen 12.6 trillion, Korean Won 134 trillion, Indian Rupee 9 trillion) at the end of the third quarter. “Emerging Markets hedge funds gained in 3Q, with China-focused funds extending strong YTD performance, while other EM regions pared YTD losses from commodity and regional equity market exposures,” commented Kenneth Heinz, president of HFR. “Leading global institutions and investors increased exposures to EM hedge funds, positioning for continuation of powerful and favorable EM and cryptocurrency trends.” Hedge funds across emerging market regions including Korea, Russia, China and the Middle East (as well as Japan) have become increasingly active in cryptocurrency trading, according to HFR. The HFR Cryptocurrency Index was up 31.3% in the third quarter and whopping 67.4% YTD 2020 through October, with returns set to increase further through the mid-4Q, according to the data provider.

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