Sat, Jan 31, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

China’s prototype sunshine hedge funds in peril

Thursday, December 20, 2012

From Precy Dumlao, Opalesque Asia – A thick cloud shrouds China’s prototype hedge funds, or so-called sunshine funds after seeing record liquidations this year, reported AsianInvestor.net.

However, insiders believe that the estimated 1,800 sunshine funds across China could rebound next year, benefiting from fresh regulations Beijing is set to implement in 2013. According to the report, the new regulations will bring flexibility in investment strategy compared to mutual funds because they will not be required to invest 60% of their portfolio in equity strategies and also allow such funds to raise their cash positions to evade risk.

Although the sunshine fund serves as a prototype of China’s hedge fund space, their remit is very limited, including the strategies they can use. The sunshine funds are not allowed to use strategies such as long/short and market neutral.

The limited strategy makes such funds vulnerable to volatile markets. Year-to-date, sunshine fund liquidations totaled 117 compared to 111 from 2011. Most of the liquidations are a result of poor performance, it was reported.

The report quoted Long Fang, managing director of West Brothers Fund Manager Research Centre as saying, "Sunshine funds beat the market in two ways: good stock-picking that can beat the benchmark, and good timing which can ease downside risk. These help the......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Ex-Citi trader launches 'sleep-at-night’ long/short equity fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: After working at Citi's proprietary trading desk, managing a large portfolio between 2008 and 2011, Joel S. Salomon founded SalaurMor Management in New Yor

  2. Investing - U.S. investors favor currency hedged Europe ETFs as euro tumbles, Quants win back investors as Swiss franc fuels volatility gains, David Einhorn's $7bn hedge fund is loading up on this stock, Hedge fund BlueMountain Capital unveils Ocwen Financial short, claims default on notes[more]

    U.S. investors favor currency hedged Europe ETFs as euro tumbles From Reuters.com: U.S. investors stung by the falling euro who want to stay invested in Europe are turning to exchange-traded funds designed to strip out the impact of the region's currency. The biggest among so-called "cur

  3. News Briefs - Millennials use tech tools to jump into investing, Winklevoss twins to launch bitcoin exchange with FDIC insured deposits, Robertson’s legacy from hedge funds to New Zealand, Real estate managers exploring smaller open-end funds[more]

    Millennials use tech tools to jump into investing It is the Facebookification of monetary investing. From social networking platforms that enable young investors to stick to every other's stock-picking mojo, to internet sites for initially-timers hungry for a piece of the Silicon Valley

  4. Update: Prosecutors seek 12 years for hedge fund manager Francisco Illarramendi[more]

    Komfie Manalo, Opalesque Asia: Federal prosecutors have asked the court to sentence convicted hedge fund manager Francisco Illarramendi to 12 years imprisonment for running an elaborate Ponzi scheme that bilked investors hundreds of millions in dollars, including a Venezuelan pension fund, report

  5. Institutions - Ontario pension fund leader calls all asset classes ‘expensive’, Taiwan's BLF plans $2bn in alternative mandates[more]

    Ontario pension fund leader calls all asset classes ‘expensive’ From WSJ.com: The head of one of the world’s largest pension funds said that across asset classes, “everything is expensive.” Ron Mock, who leads Canada’s $141 billion Ontario Teachers’ Pension Plan, said that the plan would