Emerging Markets Tops In 2Q

Date: Tuesday, August 21, 2007
Author: Hedge Fund Daily

Emerging-market hedge funds were by far the best performers in the second quarter, gaining an average of 10.26%, according to Morningstar. Specialists in that strategy held down the top five positions in a ranking of HFs with more than $100 million in assets under management. The No. 1 and No. 2 slots were occupied by China-focused funds – Qinhan Capital Management’s Qinhan China Fund, which surged 69% in the second quarter, and GEM Global Equities Management’s PharmaInvest, which rose 55.3%. Rounding out the top five were CoreVest New Frontiers Partners LP Fund (31.4%), Graham Capital Management’s Graham K4 Program (30%) and Greenwoods Asset Management’s Golden China Fund (28.9%). Trailing well behind emerging markets in performance was managed futures (7.16%), followed by equity net long (6.65%), equity variable exposure, 6.3% and merger arbitrage (5.67%). Overall, hedge funds with more than $100 AUM trailed equity indices. HFs' average 5.04%, compare unfavorably with 6.28% by the Standard & Poor’s 500 Index and Morgan Stanley  Capital International Europe Australasia Far East Index at 6.67%. Hedge funds outperformed two other indices, however: the Russell 2000 with 4.42% and the Lehman Intermediate Government/Corporate Bond Index at -0.49%. Morningstar dubbed two offerings by Standard Capital Partners as the best performing funds of hedge funds – the Rhina Alpha Fund (16.3%) and Rhina Alpha (Swiss Franc) Fund (15.6%). Four versions of Permal Group’s Permal India Holdings ranked third through sixth, with gain of between 15.6% and 14.7%.