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Asia-focused hedge funds start year with best gains since 2016

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Asia-focused hedge funds posted a 5.3% gain in January, their best monthly performance since 2016, as the share prices of Chinese companies rebounded strongly following the lifting of strict ‘zero Covid’ restrictions, according to a report by Reuters.

Asia-focused hedge funds posted a 5.3% gain in January, their best monthly performance since 2016, as the share prices of Chinese companies rebounded strongly following the lifting of strict ‘zero Covid’ restrictions, according to a report by Reuters.

The report cites a note from Goldman Sachs as revealing that January’s returns, which followed record outflows in 2022 and an average annual loss of 8%, are the strongest seen by Goldman in six years.

The best hedge fund gains stemmed from a strategy of taking long and short positions in Chinese stocks based on company fundamentals, according to Goldman Sachs, with the strategy returning 7.7% over the month. By comparison, the same approach to Japanese shares yielded 2.6%, while MSCI’s broader Asia Pacific stocks index soared 7.8% last month, outperforming the rest of the world.

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