India-focused hedge funds have been among the worst performers globally in 2011. Data from eVestment|HFN Industry Report show that the average India focused hedge funds was down -34.12% in 2011 compared to a 24% slump in Nifty Index. The sharp decline in the rupee has hurt the performance of India funds.
Foreign Investors have skipped Indian market for many reasons including high inflation and recent scams. Inflation has remained high in India for several months in 2011.However, the global economy has no rosy picture either. Euro-zone’s debt crisis and uncertainty over US have contributed to choppy stock markets.
- HFN Hedge Fund Aggregate Index was -0.19% in December and -4.90% in 2011
- Hedge fund industry AUM ended the year estimated at $2.461 trillion.
- Over 75% of EM funds posted losses in 2011. The HFN Emerging Markets Index was -16.53% in 2011.Returns were worst among funds investing in India which fell an average of over 30% .