Hedge funds have explored territory where Ucits funds feared to tread. China-focused hedgies have enthusiastically participated in the Shanghai-Hong Kong Stock Connect programme, a stock market trading link, figures suggest.
Hedge funds investing in China surged to a record monthly gain in April, lifted by the programme and by lower Chinese Central Bank rates, according to HFR, a hedge fund index provider.
The HFRI China Index of hedge fund returns increased 13%, its strongest monthly gain since the index was launched in 2008, and through the first four months of 2015, the index climbed 18.8%.
The latest hedge fund figures also show that global capital invested in the Asian hedge fund industry surpassed a milestone of $120 billion (€105 billion), according to the latest HFR Asian Hedge Fund Industry Report.
Inflows into Asian hedge funds in the first quarter totaled $1.1 billion, the tenth consecutive quarter of inflows, with capital moving into emerging and pan-Asian funds partially offset by outflows from Japanese-focused funds.
Asian hedge fund inflows were concentrated in equity-hedge strategies.
Kenneth J. Heinz, president of HFR, says: “Recent developments with Chinese equity markets, including performance and trading volume, are both exciting and historic in magnitude, with significant involvement and participation from Asian-focused hedge funds attracting capital and interest from global investors.”
He adds that it is likely that the Asian hedge fund industry is at the beginning of a capital growth cycle.
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