Pushing the Envelope Has Paid Off for Select Hedge Funds

On the whole, the past year hasn’t been great for hedge funds, but those who “ventured far afield” seemed to do better, according to a recent article in The Wall Street Journal.

Specifically, the article says that some of the biggest profits materialized in “areas less frequently traded” including:

Russia and Central Asia: One of the world’s biggest Russia-focused hedge fund firms, Moscow-based Prosperity Capital Management (approximately $3.3 billion in assets), reported a 57% gain in its flagship fund (as of December 22, 2016). The article quotes their Chief Investment Advisor, Alexander Branis, who said he has been “encouraged by corporate-governance reforms in recent years, including a government push to make state-controlled companies pay higher dividends.”

Emerging Markets: New York-based Autonomy Capital, which runs $3.9 billion in assets, saw a 22% gain in its flagship macro fund through last November. This according to an investor letter from the company which cited bets against Brazilian stocks, Chinese yuan, Turkish lira and Brazilian real as sources of the gains.

Oil: As prices have slumped in recent years, so has the number of managers focused on trading oil and commodities. However, London-based Andurand Capital (headed by former Goldman Sachs energy trader Pierre Andurand) has seen a 21% gain in its main fund as of December 23rd.

Gold: Switzerland-based Insch Capital’s Kintore strategy—a computer driven program that bets on trends in the price of gold against the dollar and other currencies– was up 22% as of December 19th.