Markets

Indian hedge funds outperform Sensex over the last year

Arvind Jayaram BL Research Bureau | Updated on March 12, 2018 Published on September 10, 2014

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Hedge funds focussing on India have delivered a superior performance over the last twelve months. According to the latest data from independent financial data and research firm Eurekahedge, Indian hedge funds delivered a 45.3 per cent return for the 12 months ended August. What is more, they have gained 28.2 per cent since the start of the year, trumping funds focused on other global markets.

Opting for a fund with a long-short equity strategy was clearly the better choice in India, with a 60.1 per cent return in the last 12 months and 36.2 per cent since the start of the current calendar year. Fixed income funds, on the other hand, were the main drag on the Indian hedge fund industry’s performance as a whole. Since August 2013, they have only managed a poor 3.5 per cent return. This has improved to a 10.4 per cent return from the start of 2014.

The equity-focused long-short funds, on the other hand, have even bettered the Sensex, which delivered 36.3 per cent and 28.8 per cent gains over a one-year-and-eight-month timeframe.

Muted global performance

Overall, the global hedge fund industry hasn’t been doing too well. Their year-to-date and one-year returns only amount to 4.2 per cent and 9.3 per cent, respectively, hardly commensurate with the sharp rise in global equities over the corresponding periods. The MSCI World Index has risen by 15.1 per cent in the past 12 months, though it has only gained 5 per cent since January.

Delving into the performance of funds targeted at various geographies threw up little reason for cheer either. North America-focused funds have only delivered a 10.9 per cent return since August 2013 and 5.4 per cent since January 2014. In the case of EM hedge funds, the returns were hardly better, at 11.3 per cent and 5.6 per cent, respectively.

The Asian hedge fund industry could only manage one-year returns of 12 per cent and year-to-date returns of 4.5 per cent, while in the case of Europe, the gains stood at a meagre 7.1 per cent and 1.5 per cent, respectively.

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Published on September 10, 2014
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