Asian hedge funds faced significant asset outflows in the first half of 2023, with data from Preqin showing a net asset outflow of USD3.7bn, marking the worst performance among four major regions. This continues a trend from 2022, which saw a USD30bn outflow. The disappointing recovery in China and robust stock markets outside the region are cited as contributing factors. Chinese equities, pivotal to Asia's stock market, have underperformed significantly due to weakening economic data and persistent geopolitical tensions. Despite some regional hedge funds outperforming benchmarks, the MSCI China Index dropped 7% this year, further deterring foreign investors. Gary Dugan, CIO of Dalma Capital, highlights investors' continued concerns regarding China. In contrast, Goldman Sachs noted a shift towards Japan due to market reforms and a stronger economy, with allocators intending to focus their investments in the country.
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