Hedge funds that reported their second-quarter returns to Morningstar rose an average of 5.25% in the quarter, slightly underperforming the S&P 500’s 5.81% rise and the MSCI World Index’s 5.82% gain. Year-to-date, hedge funds are up 7.77%, beating the S&P 500’s 6% return but falling short of the MSCI World Index’s 8.01% gain.

Although talk of market corrections in emerging markets has been gaining steam, hedge funds that specialize in these areas posted the largest gains, 9.7%. Among those, China, Russia and Brazil funds fueled strong performance.

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