The assets of hedge funds investing in emerging markets have surged above the $200 billion mark for the first time, rising by $9.3 billion in 2016, according to industry tracker Hedge Fund Research (HFR) said on Thursday. The Chicago-based group said the growth had been led by hedge funds invested in Russia and Latin America, with total capital invested in Latam-focused hedge funds increasing by $6.3 billion in 2016 and the assets of Russia and Eastern Europe-focused funds up $2.5 billion.
"Strong performance gains, specially focused on Latin America and Russia/Eastern Europe, contributed to this growth as investors positioned for the impact of divergent monetary policies in US and Europe on emerging markets," HFR said. HFR's index of emerging market returns rose 7 percent in 2016 and got off to a strong 2017 start with January gains of 3.2 percent, the group said.