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Hao Capital hedge fund gains 97.8% YTD
With all the steep losses and fund closures since Black Monday, the words “hedge fund” and “China” don’t exactly paint a pretty picture when you piece the two together. Hao Capital’s hedge fund however, seems to be a little different.
According to Reuters, Hao Capital posted an amazing 97.8% return for the year – a stellar performance by any measure and made even better by the fact that most China-centric funds are currently nursing losses.
Run by Zhang Hao, an electronics engineer and ex-Prime Capital Management analyst, the fund made most of its gains by betting on appliance companies such as Haier Electronics Group and Gree Electric Appliances as well as by taking big bets against solar energy stocks. Another secret to its success? Zhang's reluctance in joining the A-share herd:
“In May, the fund manager told investors he sidestepped some of the frenzied buying in Chinese A shares because he was worried about the emotional nature of individual investors who made up more than three-quarters of that trading volume.
‘From a cultural perspective, these investors are less prone to logical thinking, and prefer stories of a company to its market value calculation,’ the manager wrote.”
It wasn’t all rainbows and butterflies though. Zhang apparently took a nasty hit last month when his longs fell over 17%, thankfully however his shorts gained 7.63% at the same time and trimmed his losses down to 9.5%.
Despite that blip, his fund is currently up 132.5% since its August 2014 inception, and has more than tripled its AUM to $212 million in the process.
Photo: Dorli Photography