Indian stocks have emerged as most attractive bet for hedge funds, fall guys during recent subprime crisis, with returns better than that of BSE Sensex.
According to a study of over 7,000 hedge funds across the world, those focused on India have emerged on top as best performing groups in the last five-and-a-half years.
International hedge fund tracking firm HedgeFund.Net (HFN) in its study said India-focused funds generated an average return of 3.09 per cent during July this year — a month when most of the developed markets moved downward.
Besides, in the first seven months this year, these funds have recorded an average return of 19.6 per cent, against a fall of over 22 per cent in Sensex during the same period. Hedge funds are generally speculative funds managing funds for private investors and also collect a part of the profit, besides a management fee from the investors.
HFN Vice-President Peter Laurelli said average return of India-focused funds were 53.63 per cent in the one-year period through July, which outpaced 44.74 per cent rise in the Sensex during same period.
The report said outperforming of local benchmark by India-focused funds is a new development and the scenario has reversed in comparison with the 2005-06 period. The average returns on India funds was 21 per cent and 27.86 per cent in 2005 and 2006, respectively, whereas Sensex returned 42.33 per cent and 46.7 per cent during corresponding periods.
