Greater China-focused hedge funds were up 2.20% in August, beating the market while Shanghai Shenzhen CSI 300 Index declined 4.45% during the month, according to date released by hedge fund research firm Eurekahedge.
Performance was driven by rising financial stocks, the development surrounding the Shenzhen-Hong Kong Stock Connect program, and better-than-expected earnings report of Chinese companies.
On a year-to-date basis, China mandated hedge funds were down 2.25%, outperforming the CSI 300 Index, which dropped 13% for the year.
Returns of Chinese hedge fund managers led to Asia ex-Japan funds posting the best numbers among all regional hedge fund indexes, as the Asian index went up 1.24% in August.
European hedge fund managers were up 0.55%, followed by North American managers, who were up 0.54%. Japanese managers were down 0.13%, and Latin American funds were up 0.75% during the month.
Globally, hedge funds were flat at marginally negative return of 0.06% during August, as underlying markets as represented by the MSCI World Index were up 0.48%.
In terms of strategy, distressed debt funds posted the best returns in August and was up 1.77%. Long/short equities hedge funds were up 0.54% with equity long bias hedge funds posting an impressive 1.32% gain, boosted by the well-performing global equity markets during the month.