(Bloomberg) Russian assets, which are among the most volatile in the world, are bringing hedge fund managers the best returns in emerging markets. Funds with a geographical focus on the country have gained an average 29 percent since the start of 2015, more than any others geared toward major developing nations, according to industry tracker eVestment. That’s 8 times more than China-focused funds and 16 times the return of firms investing in India. The MSCI Russia Index rose 17 percent during the same period.
The performance of Russia’s financial markets is closely tied to the price of oil, the country’s biggest export. Many managers of traditional funds have fled a stock market that in the past 16 months has oscillated between posting the world’s best monthly performance and double-digit losses, while the currency sank as much as 68 percent as Brent crude plunged to the lowest price since 2003. Hedge funds, which are less restricted and can use riskier investment strategies to amplify returns, thrived in that environment.
