Several Asian hedge fund managers underperformed in September, contributing to losses for the year, according to Eurekahedge data.
Asia ex-Japan hedge fund managers lost 1.8% in September, barely ahead of the benchmark MSCI AC Asia Pacific ex-Japan index, which declined 1.87% over the month in local currency terms.
So far, the Eurekahedge Asia ex-Japan hedge fund index is down 5% for the year, in stark contrast to its positive returns of 20.82% in 2017.
The major contributing factors for underperformance continue to be US-China trade tensions, weak currencies and slowing growth in China. These concerns are expected to remain for the rest of the year.
Greater China managers posted a fourth consecutive month of losses as they ended September down 3.65%. On a year-to-date basis, Eurekahedge’s Greater China index has lost 9.89%.
India-focused managers, meanwhile, recorded their worst month since October 2008, posting losses of 10.26%. As a result, the Eurekahedge India Hedge Fund Index is down 18.38% in US dollar terms for the year.
While hedge funds investing in North America and Europe were also in the red last month, their year-to-date performance is positive, with their respective Eurekahedge indices returning 3.16% and 0.02%.
Japan-focused mandates were also down in September, recording losses of 3.33% year-to-date.
Surprisingly, Eastern Europe and Latin America managers were up in September. ‘[They] ended the month up 1.91% and 1.19% respectively, supported by the rebound in the regions' underlying equity markets following the beating they took back in August,’ Eurekahedge wrote in a report.
Eurekahedge’s Latin American index is up 2.2% for the year, while the Eastern European and Russia index has fallen 8.96%.
According to eVestment, another hedge fund data provider, distressed debt funds were the biggest outperformers in September, returning 0.84% in September and 4.92% year-to-date.
Origination and financing funds have been another bright spot for the year, according to an eVestment report.
The funds’ September returns were 0.28% last month, with year-to-date returns for the strategy at 4.33%. Meanwhile, equity long/short funds, which have been popular among wealth managers since the start of the year, lost 0.28% last month.
However, the strategy has generated positive performance of 2.99% on average in the first three quarters of the year. On the other hand, managed futures and market neutral equity strategies have performed badly in 2018, down 2.48% and 0.55% respectively for the year.