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Alternative Market Briefing

Emerging markets hedge funds head for worst loss since 2011: HFRI

Wednesday, November 28, 2018

Laxman Pai, Opalesque Asia:

Emerging markets (EM) hedge funds extended their losses from the first half of 2018 through 3Q and October, as global and EM regional equities, currencies and hedge funds all posted sharp declines.

According to HFR Emerging Markets Industry Report, investors redeemed $3.1bn from Emerging Market hedge funds in 3Q18, the largest quarterly redemption since 1Q 2009.

Total EM hedge fund capital fell by $4.0bn in 3Q18 to $227.1bn (RMB: 1.58tn, Brazilian Real: 883bn, Indian Rupee: 16.1tn, Russian Rouble: 15.3tn, Saudi Real: 852bn).

"After navigating the falling Emerging Markets currency weakness in early 3Q, volatility in EM hedge funds spiked in recent months as regional equity market losses in both emerging and developed markets accelerated," stated Kenneth J. Heinz, President of HFR.

The HFRI Emerging Markets (Total) Index fell -3.7% in October, bringing the YTD return to -10.7%, on pace for the worst calendar year of performance since declining -14.0% in 2011. October also marked the eighth monthly decline in the first 10 months of 2018.

The HFRI Fund Weighted Composite Index, which includes hedge funds globally of all strategies and regional investment focus areas, also posted a sharp decline of -3.15% in October, lowering the YTD return to -1.9% through October.

HFRI Latin America Index surges in volatile October

Latin America-focused hedge funds led global hedge fund performance with a sharp, negatively-correlated ......................

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