Indian stocks have emerged as the most attractive bet for hedge funds, the fall guys during the recent subprime crisis, with returns better than that of the Sensex. According to a study of over 7,000 hedge funds across the world, those focused on India have emerged on top in the past five-and-a-half years. International hedge fund tracking firm HedgeFund.Net (HFN) said in its study, India-focused funds generated an average return of 3.09% during July this year — a month when most of the developed markets moved downward. Besides, in the first seven months of this year, these funds have recorded an average return of 19.6% against a fall of over 22% in Sensex during the same period. HFN vice-president Peter Laurelli, the author of the report, said the average return of India-focused funds were 53.63% in the one-year period through July, which outpaced 44.74% rise in the Sensex during same period. The report said the outperforming of the local benchmark by India-focused funds is a new development and the scenario has reversed in comparison with the 2005-06 period.   more »

They may be getting roiled across the world markets, but in a relative sense, the much admired and criticised hedge funds have had a good run in India in July and August, when the funds were subject to turmoil worldwide in the wake of the subprime loan crisis, and also much of this year. HedgeFund.net (HFN), an agency that studies the flows and returns of some 7,000 hedge funds, says India-focused hedge funds outperformed the benchmark Sensex in August, and also in a one-year view to July. “Funds investing in India’s markets typified the dislocation of returns to regional/country equity benchmarks seen in August. In the three months prior to August, funds investing in India returned an average of +12.39 per cent, slightly outperforming the Sensex which was +12.10 per cent,” HFN analyst Peter Laurelli said. In the crunch week of mid-August when bad news on high-risk sub-prime lending shook global markets, the Sensex slid 6.75 per cent, and despite rallying 9.5 per cent ended the month down only slightly, while the average India focussed fund was down 4 per cent in August, Laurelli said.   more »