In a Strong Year for Hedge Funds, Asia-Focused Funds Lead

10 Jan

In a Strong Year for Hedge Funds, Asia-Focused Funds Lead

The global hedge fund industry saw a strong 2017, with aggregate returns for the year coming in at +8.83%, according to the eVestment 2017 December and Year-End Hedge Fund Performance Report. This is a welcome return to strong performance following the +5.7% hedge funds returned in 2016 and the -0.71% aggregate return the industry delivered in 2015.

Hedge funds focused on India and China were the strongest overall performers in the industry in 2017. India-focused funds returned +35.01% for the year, compared to +4.53% in 2016 and +3.87% in 2015. China-focused hedge funds came in a close second for the year, returning +34.82% in 2017, up strongly from the negative performance of -5.39% in 2016 and the +9.49% China-focused hedge funds returned in 2015.

Other interesting points from the report include:

  • From a regional perspective, Asia outperformed the rest of the world in hedge fund returns, with Asia-focused hedge funds overall returning +21.47% in 2017. Africa-Middle-East-focused funds came in second from a regional perspective, returning +16.42% in 2017. North-America-focused and developed-Europe focused funds both returned almost +8.4%.
  • For funds domiciled in Asia, there was a similar strong-return story. Asia-domiciled hedge funds returned +18.60% in 2017, compared to +9.34% for hedge funds domiciled in the United Kingdom, +7.87% for hedge funds domiciled in the United States and +7.08% for hedge funds domiciled in continental Europe.
  • Among primary strategies, Long/Short Equity funds were the big winners in 2017, returning +11.79% for the year. Other stand-outs among primary strategies included Quantitative Directional Equity funds, which returned +9.29% for the year, and Event Driven-Activist funds, which returned +8.49% for the year.
  • Among primary markets, Equity-focused funds were strong performers in 2017, returning +13.14% for the year.
  • Across the industry, over 80% of the hedge funds tracked by eVestment delivered positive results in 2017 and 60% of funds improved their performance compared to 2016 results.

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