The HSBC AsiaHedge Composite Index closed out the first quarter in 2005 with a gain of 2.2% for the first three months of the year. This followed a flat March, when the Asia-Pacific hedge fund space returned to broad out performance of the region’s major benchmark indices.
In March, both Asia including Japan and excluding Japan strategies were negative. Ex-Japan strategies did better than their Asia including Japan peers, down about -1.9% compared to -3.7% for the MSCI Pacific free ex-Japan index. The Pacific free index fell -2.5% compared to -2.2% for the Asia including Japan regional hedge fund strategy.
The numbers tend to suggest that these particular strategies have not become bastions for leveraged long-only funds. Losses in these particular strategies would have been much higher if that had been the case.
Despite down markets for both the Nikkei and the Australian markets, both of the appropriate hedge fund indexes for these markets were in positive territory. The Australian All Ordinaries was down -1.3%. The HSBC AsiaHedge Australia Index put on 0.5%. Similarly, Japan invested hedge funds also did well, up 0.7% compared to a drop of -0.6% for the Nikkei.
Following a period when investors have grown remarkably cool on the Japan hedge fund space, marked by the much slower influx of funds in to that strategy in the latter part of last year, Japan long/short now leads the key Asia-Pacific hedge fund indexes along with Australia. Japan long/short Yen is now up 3.0% for the year compared to 2.6% for Australia. Asia including Japan assumes the rear-guard position for the first quarter of the year, up just 1.2%…..