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Hedge Funds See Strong 2017 Returns, Asia Funds Leading the Way
Following an "ok" 2016 and major losses in 2015, the global hedge fund industry closed out 2017 with strong overall returns.
The global hedge fund industry saw a strong 2017, with aggregate returns for the year coming in at +8.83%, according to the eVestment 2017 December and Year-End Hedge Fund Performance Report. This is a welcome return to strong performance following the +5.7% hedge funds returned in 2016 and the -0.71% aggregate return the industry delivered in 2015.
Hedge funds focused on India and China were the strongest overall performers in the industry in 2017. India-focused funds returned +35.01% for the year, compared to +4.53% in 2016 and +3.87% in 2015. China-focused hedge funds came in a close second for the year, returning +34.82% in 2017, up strongly from the negative performance of -5.39% in 2016 and the +9.49% China-focused hedge funds returned in 2015.
Other interesting points from the report include:
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- From a regional perspective, Asia outperformed the rest of the world in hedge fund returns, with Asia-focused hedge funds overall returning +21.47% in 2017. Africa-Middle-East-focused funds came in second from a regional perspective, returning +16.42% in 2017. North-America-focused and developed-Europe focused funds both returned almost +8.4%.
- For funds domiciled in Asia, there was a similar strong-return story. Asia-domiciled hedge funds returned +18.60% in 2017, compared to +9.34% for hedge funds domiciled in the United Kingdom, +7.87% for hedge funds domiciled in the United States and +7.08% for hedge funds domiciled in continental Europe.
- Among primary strategies, Long/Short Equity funds were the big winners in 2017, returning +11.79% for the year. Other stand-outs among primary strategies included Quantitative Directional Equity funds, which returned +9.29% for the year, and Event Driven-Activist funds, which returned +8.49% for the year.
- Among primary markets, Equity-focused funds were strong performers in 2017, returning +13.14% for the year.
- Across the industry, over 80% of the hedge funds tracked by eVestment delivered positive results in 2017 and 60% of funds improved their performance compared to 2016 results.
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