Salient to Investors:
Asia hedge funds 1.6 percent in 2012 thru August versus 3.2 percent for the global benchmark and have ad outflows of $447 million in 2012. The MSCI Asia Pacific Index is up 8.2 percent in 2012 versus up 13 percent for the MSCI World Index. Hedge Fund Research said 77% of Asia funds are equity-related versus 46 percent globally.
The often smaller asset base of Asian funds makes it harder to absorb the costs of stricter regulatory and risk-management compliance.
Richard Cardiff at CC Asia Absolute Return Fund said that most hedge funds spent too much time trying to guess the macro direction of the markets and less time trying to find stocks to deliver earnings. Cardiff said this year quality stocks haven’t done as well as cyclicals which are more sensitive to economic moves.
Fred Ingham at Neuberger Berman said many Asian hedge funds remain equity focused and long biased so are more exposed to equity-market volatility, plus a lack of hedging tools relative to the West and a tendency to try to capture market upside has meant that Asian hedge funds have struggled.