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From Precy Dumlao, Opalesque Asia:

A study of 40 India-focused hedge funds by Hedgefund.net confirmed that the region was the focus of some of the best performing hedge funds in 2010, and they have produced nearly double the returns of the SENSEX this year.

The findings, contained in HFN's "Regional Focus Report," showed that the HFN India Index was up 0.88% in August (+6.34% YTD) compared with +3.25% YTD gain for the BSE SENSEX (India's primary equity market index) and +1.89% YTD for the HFN Hedge Fund Aggregate Index. Since inception in January 2002 (through August 2010) the HFN India Index rose 334%, while the SENSEX rose 445% and the HFN Hedge Fund Aggregate Index rose 93%.

HFN reported that at the end of August-2010, total hedge fund assets invested in Indian markets and securities were above $9.5bn. However, that is still less than half the hedge fund assets since the peak of $18.74bn, in December 2007. During the global financial crisis, as hedge fund assets left the industry, India-focused hedge fund investments fell to a low of $5.92bn in Q1 2009, a total decline of 68%.

During that decline in assets, performance for the HFN Index fell 30% compared to an 11% decline in the SENSEX and a 3% rise for the broad hedge fund industry.

But investors may be anticipating future growth in these markets as last month, India fund assets jumped by 17% or $1.4bn from combined net inflows......................

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