Hedge funds are not performing well this year. Hedge Fund Research Inc.’s HFRX Global Hedge Fund Index was down 1.59% in June. In the first half of 2011, hedge funds averaged a loss of -2.12% Among emerging markets, Brazil and Russia hedge funds fared better, with average return of 1.18% and 1.64% respectively for the same period. Indian hedge funds have the worst performance till now. Data from Hedge Fund Research show that the average India focused hedge fund was down 7.89% through the first half of this year compared to a 8.29% slump in Nifty Index.
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, uncertainty over US and China economy and Japan’s nuclear crisis have contributed to choppy stock markets.