(Bloomberg) — Some Asia-based hedge funds booked exceptional gains in April, while other suffered deep losses as Donald Trump’s tariff hikes unsettled markets.
The volatility-focused True Partner Fund rose 5.3% in its strongest month in more than five years, according to a newsletter sent to investors. MY.Alpha Management’s roughly $700 million Japan hedge fund returned 6.5%, said people with knowledge of the matter.
On the other hand, Arete Macro Fund’s 9.2% loss in April marked the worst month since it began trading in 2012, according to an investor update. Ariose China Growth Fund slumped 10%, people with knowledge of the matter said.
The wide divergence underscores how fund managers are still trying to navigate Trump’s unpredictable policymaking. The US president announced a 90-day pause on higher duties on most trading partners except China, hours after his “Liberation Day” tariffs took effect. The about-face sent regional stock indexes such as Japan’s Topix and South Korea’s Kospi on a V-shaped recovery during the month, sparing hedge funds from worse losses.
The True Partner Fund trades listed index options that either underprice or overprice volatility across the US, Asia and Europe. It surged 7.9% this year through April, according to the document.
“Investors were caught wrongfooted by the magnitude of the ‘reciprocal’ tariffs,” the fund wrote. “Most of the gains were made on the declines early in the month following Liberation Day.”
MY.Alpha’s Masahiko Yamaguchi led his York Capital Management Asia team to spin off in late 2021. Its Japan hedge fund made money in April from company event trades, as the return of inflation and corporate governance reforms spurred dealmaking in Asia’s second-largest economy.
The positive April extended its gain in the first four months to 9.6%, said the people. Its $1.2 billion older fund that invests across a diverse range of Asian economies also edged up 0.8% in April for a 5.4% increase this year, they added.
The Arete Macro Fund’s April decline deepened this year’s drop to 10%, according to the investor update. That represented a reversal from 2024, when the fund was up nearly 18% in its best year in a decade, helped by bullish bets on Chinese equities in anticipation of government stimulus and on the dollar based on the strength of the world’s largest economy. The April loss came as Will Li’s Ocean Arete Ltd. cut risk amid the tariff-induced market volatility, said a person with knowledge of the matter.
Ariose’s fund booked a 13.5% return in March, before the April slump, highlighting the choppy market. While backing down on higher levies on other trading partners, Trump hiked tariffs on Chinese imports to as much as 145% before agreeing to a 90-day truce this month. Various China and Hong Kong stock gauges were among the worst-performing in the Asia-Pacific region last month. The Ariose fund was down 5.3% in the first four months.
Representatives of Ariose, MY.Alpha and Ocean Arete declined to comment.
While Trump’s temporary retreat from higher tariffs gave the markets a breather, the downside is the administration would lose the revenue it previously touted to significantly offset budget deficits while extending tax cuts, True Partner wrote in the letter.
Markets may be surprised by future developments, it said. “We continue to see significant uncertainty ahead.”
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