By Summer Zhen
HONG KONG (Reuters) -Two of Asia’s largest multi-strategy hedge funds had another strong month in June and ended the first half on a high note, as equity markets roared back after shaking off trade war fears.
Singapore’s Dymon Asia Capital’s flagship multi-strategy fund, which manages more than $3 billion in assets, finished up 2% last month, bringing its first-half gain to 10.1%, according to a source with knowledge of the matter.
The fund’s June performance was driven by bets on fundamental equities, particularly in Japan and South Korea with macro and relative value strategies also contributing to gains, the source said.
Hong Kong-based Pinpoint Asset Management’s main multi-strategy fund, which manages more than $1 billion in assets, climbed 3.5% last month and ended the first half up 6.5%, thanks to an increased allocation to equities, a separate source with knowledge of the matter said.
Pinpoint’s equity long-short China Fund gained 4.4% in June and 9.4% for the first half.
Asian hedge funds on average gained 5.2% this year through June 27, outpacing the 4.4% return for global peers, according to a July 2 Morgan Stanley client note, which added that their risk appetite is growing.
Signs of a thaw in the U.S.-China trade war, an influx of foreign capital into Asia as investors diversify away from U.S. dollar assets, and South Korea’s new market-reform initiatives have helped the region stage a strong comeback from market turmoil in early April when U.S. President Donald Trump announced his “Liberation Day” tariff plan.
Market participants say global investors are seeing a better risk-to-reward balance in the region.
The MSCI Asia-Pacific Index climbed 12% in the first half, with South Korea’s Kospi index jumping 28% and Hong Kong’s Hang Seng surging 21%.
Asian hedge funds’ gross leverage – which combines both long and short positions and is a gauge of how much they are trading – rose to 141% near 12-month highs, according to Morgan Stanley.
Net leverage, which measures long minus short positions, increased to 61%, it said.
(Reporting by Summer Zhen; Editing by Vidya Ranganathan and Edwina Gibbs)
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