(MarketWatch) His approach is NOT for the faint of heart.
In 2016, Chong Chin Eai raised $24 million from friends and family and launched his Singapore-based Vanda Global Fund. Then Trump won the election, and, according to Bloomberg, the hedge fund suddenly was off more than 50%.
“A lot of fund managers would’ve just given up after six months to start a brand new track record,” Chong told Bloomberg in an interview. “But I wanted to show investors the flow of the fund and the growth of the fund, both in terms of the performance and also in myself.”
While he was tempted, Chong didn’t shutter the shop, and it looks like he made the right decision. Now, Vanda, with almost $200 million in assets under management, has surged 278% this year through July, making it the world’s top-performing hedge fund, Eurekahedge Pte data show.
In comparison, the S&P 500 index SPX, -0.32% tacked on about 20% through the first seven months of the year. Good, but not 278%.
So how does Chong do it?
By investing in the hairy world of exchanged-traded futures. Vanda currently has more than 100 positions covering asset classes from commodities and government bonds to stocks. The highly leveraged nature of these investments can deliver gut-wrenching moves, and Vanda knows all about those.
The fund surged 260% in 2017 but lost 49% in 2019, Bloomberg reported.
Chong, who charges his deep-pocketed investors a 2% annual management fee plus a 20% performance fee, hedges those futures risks by putting as much as half of the fund into low-interest money market accounts.
