Hedge funds with exposure to Russia and Latin America set the pace during April, although total capital invested in emerging market funds fell, new figures show.

Hedge funds investing in Russian and Latin American emerging markets led performance through April, as global and emerging market equity, commodity and currency markets surged in recent weeks following steep losses to begin the year, figures show.

The HFRI EM: Latin America Index leads all areas of hedge fund performance for 2016 with a gain of 15.3 per cent through April, according to the latest HFR Emerging Markets Hedge Fund Industry Report, released today by Hedge Fund Research.

Recent gains for the LatAm Index are encouraging for investors in what has been a challenging regional area of performance in recent years. The Index fell 20.9 per cent in 2015 and has fallen in four of the past five calendar years, though the March 2016 gain of 10.0 per cent was the highest monthly gain since April 2003. 

The HFRI Emerging Markets (Total) Index, which includes globally-based emerging market funds, has advanced 1.7 per cent year-to-date through April, with gains in Russia and LatAm partially offset by declines in emerging Asia and MENA.

Hedge funds investing in Russia have also posted strong gains for 2016, with the HFRI EM: Russia/E Europe Index gaining 12.2 per cent through April.

Total hedge fund capital invested in emerging markets globally declined to $185.1 billion as of the end of the first quarter, falling from $191.3 billion at year-end 2015 and a record of $198.2 billion as of Q2 2015. 

Hedge funds investing in emerging Asia have outperformed volatile regional Asian equity markets, while total capital invested in emerging Asia hedge funds has declined to $48.7 billion as of Q1 2016.

The HFRI EM: Asia ex-Japan Index declined 2.8 per cent YTD through April while the HFRI EM: China Index fell 5.9 per cent.