The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Asian strategy: Asia hedge funds fall from grace

After being among the top performers of 2007, Asia-focused hedge funds are suffering this year. In 2007, the HFR Asia composite hedge fund index returned more than 17%, and the Asia ex-Japan index almost 40%. Year to end-May 2008, however, the Asia ex-Japan index is down almost 10%. If investors piled in based on past performance, they will now be kicking themselves.

Ken Heinz, president of HFR, says poor performance in the Asian hedge fund industry is a result of several factors, of which declines in Asia’s equity markets and the strategy composition of the Asian hedge fund industry are both significant ones. The Chinese market is down about 40% year to date.

"Asia-focused hedge funds have a much higher equity strategy component than other regional-focused funds," says Heinz. "Some two-thirds of funds are equity hedge compared with globally, where just over one-third of all strategies are equity hedge. So the impact of underlying equity market declines becomes more pronounced in Asia."

Intensifying the decline in aggregate returns is the fact that only a small proportion of Asia-focused funds are running a macro strategy. Macro strategies have been the outperformers of the past nine months, with the HFRI Macro Index posting a gain of more than 12% since September 2007 and HFRX Macro Index having gained more than 12% year to date.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree