|Eurekahedge Regional Indices
| Eastern Europe & Russia
Risk aversion returned to global markets in August driven by a host of factors. The increased likelihood of the United States waging another war in the Middle East, weakening economic situation in emerging markets and continued concerns of QE tapering by the US Federal Reserve (Fed) were the main drivers of the negative market sentiment during the month. Some of the negativity was offset by improving global economic data as the Eurozone emerged from recession and China PMI numbers also displaying positive trends.
Returns were mixed among the various regional mandates with Latin American and North America hedge funds delivering the strongest returns. The Eurekahedge Latin American Hedge Fund Index gained 0.48% in August mostly due to strong returns posted by Brazil-focused funds, which were up on the back of a strong rebound in the Bovespa (up 3.68%). Managers' holdings were buoyed by surprisingly strong GDP numbers for 2Q 2013 and currency intervention program announced by the Central Bank of Brazil. North American managers outperformed the S&P 500, which declined 3.13% in August. A number of managers had indicated net short positions for August, amid expectations of an announcement of QE-tapering by the Fed, which helped them to post positive returns during the month.
Asian hedge funds outperformed the underlying markets once again, delivering healthy returns amid broadly negative trends in underlying market indices. Managers investing in Asia ex-Japan were up 0.13% while the MSCI Asia ex-Japan index declined 1.22% in August. Japan-focused hedge funds outperformed the underlying markets for the fourth consecutive month, gaining 0.11% while the Nikkei 225 was down 2.04% and the Tokyo Topix declined by 2.27% during the month.