New data from Hedge Fund Research show that emerging markets hedge funds manage about $223 billion in assets, the highest estimate since the hedge fund data firm began tracking the fund group. Some $340 million in net assets were committed to EM funds during the third quarter after $800 million came in during the second quarter. The two quarters followed seven consecutive quarters of outflows with EM managers losing $9.6 billion along the way. Although recent inflows have been positive, the industry has had overall net outflows since the third quarter of 2013.
The net outflows have been more than offset by manager performance. Through Sept. 30, the HFRI Emerging Market index was up 16.2%, led by the China and India subindexes with 28.1% and 26.9% returns, respectively.