Small Japan hedge funds beat the Topix in returns

Tokyo

AIMING small is helping some Japanese hedge funds deliver outsized returns.

Simplex Asset Management Co's Japan Lower Market Strategy Fund, which scours the nation's three regional exchanges for small-cap stocks, returned 29 per cent in the first six months of the year. Eschewing big-name companies also helped Sparx Group Co's Value Impact Fund gain 19 per cent in the first half, while Strategic Capital Inc's activist fund added 15 per cent, according to the firms.

The gains stand out even against the backdrop of rising returns for Japan hedge funds, which were buoyed by a rebound in the nation's stocks amid optimism in the global economy to rank as this year's third-best performers behind Pan-Asian and Latin America-focused strategies. The Eurekahedge Japan Hedge Fund Index gained 4.9 per cent in the first six months, rebounding from its worst perform…