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Less China, more India make Singapore hedge funds Asia's best

[SINGAPORE] Singapore-based hedge funds outperformed Asian rivals during the first seven months of the year thanks to a greater focus on India and global markets, according to data provider Eurekahedge Pte Ltd.

Funds headquartered in Singapore returned 2 per cent through July, while Hong Kong-based funds declined an average 2.3 per cent, Eurekahedge said in a report Tuesday. Funds based in Australia rose 1.9 per cent, while Japan-based funds declined 2.5 per cent, the report said.

While the majority of funds based in Hong Kong and Japan invest in Chinese or Japanese stocks, where markets have posted steep losses this year, Singapore has more funds with a global mandate or an India focus, according to Eurekahedge. Australia-headquartered funds mainly invest in global equity long-short strategies, which didn't do well until August.

India's benchmark S&P BSE Sensex Index has rallied 9.4 per cent this year, compared with a 13 per cent decline in China's CSI 300 Index and a 15 per cent slump in Japan's Topix index.

"Singapore has the most diversified hedge fund industry in Asia with regard to managers' strategic and regional mandates," said Mohammad Hassan, head of hedge fund research at Eurekahedge. "Diversification has helped the domestic industry post the best overall gains in Asia, while China and Japan equity-focused centres such as Hong Kong and Japan are in the red."

India-focused funds have returned 7.3 per cent through the end of August, according to Eurekahedge, making them the third-best performers globally, behind only Taiwan and Latin America. Funds investing in China lost 1.6 per cent and those betting on Japan declined 4.4 per cent, the data show.

This year's ranking reverses a multi-year trend of Hong Kong funds posting the best returns in Asia, the Eurekahedge data show. Funds based in the city have returned 379 per cent since the end of 1999, followed by a 354 per cent gain by Australian hedge funds. Singapore comes in third at 253 per cent, and Japan-based funds lag with a 95 per cent return.

Among Singapore-based hedge funds investing in India is the Progress India Opportunities Fund, started in December 2014. The US$49 million equity fund with a long bias investing in consumer themes returned 13.8 per cent this year through the end of August, according to a newsletter obtained by Bloomberg News.

The IPEplus Fund 1, also focused on India and started in 2014 by former 3i Group Plc Asia head Anil Ahuja, returned 2.1 per cent through August, according to data compiled by Bloomberg.

The Singapore-based PruLev Global Macro Fund, managed by Norman Tang and August Li and investing mainly in global liquid developed markets, has gained 56 per cent through August, according to the fund's newsletter.

By contrast, the Hong Kong-based Springs China Opportunities Fund, a China-focused long-short equity fund, lost 8.7 per cent this year through July, according to data compiled by Bloomberg.

BLOOMBERG