HONG KONG — Asian equity-focused hedge funds have risen in May, erasing April’s tariff-driven losses and returning to year-to-date highs on the back of broad market gains.
Asia-focused fundamental long-short hedge funds have posted a gain of 1.6 percent so far this month, bringing year-to-date performance back to the first-quarter high of 6.1 percent, according to a Goldman Sachs note citing data as of May 22.
By country, China-focused fundamental managers have returned 1.3 percent in May, while Japan-focused peers are up 0.8 percent, Goldman Sachs estimated.
However, the gains lag major benchmarks, as many funds had aggressively cut positions amid extreme volatility in early April.
The MSCI Asia-Pacific Index has advanced more than 4 percent this month.
“The V-shaped recovery was hard to trade for some,” said Patrick Ghali, managing partner of hedge fund advisory firm Sussex Partners.
Depending on positioning, Asian hedge funds’ performance has diverged since April and “we will see a lot more dispersion of returns,” he added.
Goldman Sachs noted dispersion is particularly high in hedge funds trading Japanese shares.
Despite ongoing tariff and geopolitical uncertainties, most hedge funds appear more willing to take on risk.
Net exposure among Asian equity hedge funds jumped to 50.8 percent as of May 22, up from 46 percent at the end of April, Goldman Sachs says.
