India-focused hedge funds continue to beat markets

Arvind JayaramBL Research Bureau Updated - March 12, 2018 at 05:03 PM.

Deliver 36.4% returns in Jan-Oct period against Sensex’s 29.2%

Hedgefunds

India-focused hedge funds continued to deliver market-beating returns in October 2014. While the BSE benchmark Sensex index mustered a 2.7 per cent gain last month, Indian hedge funds offered a superior 3.5 per cent return in October, according to the latest data from Eurekahedge, an alternative investment fund data provider.

Year-to-date, too, hedge fund returns trumped the Sensex’s performance. According to the data, Indian hedge fund returns in the January-October period stood at 36.4 per cent, even higher than the sterling 29.2 per cent rise in the Sensex during the 10-month period. This marks a significant comeback for Indian funds from a dismal 2013, when they posted losses of 8.5 per cent.

Winning strategy

A closer perusal reveals that hedge funds with a long-short equity strategy continue to reap the benefits of a buoyant market, rising by nearly 50 per cent this year. In October, however, their returns were muted, at just 3.49 per cent, their poorest gain since April. Even multi-strategy hedge funds have put up a decent performance in 2014, with 19.9 per cent returns.

However, investors are unlikely to be enthused by their marginal loss (0.03 per cent) in October.

Global gloom

The party in India notwithstanding, hedge funds have been having a tough time globally in 2014. They have only notched up gains of 1.6 per cent during the year thus far, compared to an 8.7 per cent increase in the whole of 2013.

What’s more, in the last three months, they have lost 1.2 per cent. North American funds, however, delivered 3.1 per cent returns in 2014, though negative returns in the past two months have dampened the mood.

European funds, on the other hand, just managed to stay in the green with 0.07 per cent returns, while Asia and emerging market-oriented funds have gained 5.1 per cent and 4.7 per cent, respectively. Latin America-focused hedge funds rose 3.1 per cent in the January-October 2014 period.

Published on November 4, 2014 16:56