China and Japan Hedge Funds Claw Back from Early Losses

Asian hedge funds focused on investing in China posted sharp gains in Q3 2016, paring steep declines they posted early this year, as investor risk tolerance and market Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term returned. The upbeat performance was driven by China’s Renminbi stabilization and stock market recovery, according to latest HFR Asian Hedge Fund Industry Report.

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The HFR quarterly report provides region-specific analysis that highlights the aggregate performance and characteristics of Asia-focused hedge fund strategies for global investors, asset managers and service providers.

The company’s benchmark reference rate, the HFRI China Index, jumped +7.5 percent in three months through September 2016, while the HFRI Asia ex-Japan Index added +6.7 percent compared to Q3 2015.

Fresh investor capital continued to flow into the sector during the period, with total Asian hedge fund capital increasing to an estimated $111.8 billion across all strategy areas. However, the figure is still well below its peak of $119.8 billion which was registered earlier in 2014.

Hedge funds focused on Japan also enjoyed good returns in the reported quarter as investors started nibbling at Tokyo shares again after suffering losses earlier this year by betting on a weaker yen. However, the outlook for the yen remains as murky as ever ahead of Bank of Japan and U.S. Federal Reserve policy reviews. Some fund managers think Japanese stocks are looking attractive again after tumbling 13 percent from January.

Commenting on the findings, Kenneth J. Heinz, President of HFR, said: "Asian hedge funds have effectively navigated intense regional equity market and currency volatility in 2016, topping sharp YTD losses for the Shanghai Composite and the Nikkei 225. With the macroeconomic and political overhang of both the US election and Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term now removed, and as global M&A continues to accelerate, we expect strong performance of specialized Asian hedge fund strategies to attract global and institutional investors while leading industry performance into 2017."