Goldman Sachs is shutting down two hedge funds run by senior executives in Asia according to information attained by Bloomberg. Together, the funds managed about $1.4 billion in assets, and were run by partners Ryan Thall and Hideki Kinuhata who are reportedly leaving to start an individual fund and retiring, respectively.

The two funds are operated under the Goldman Sachs Investment Partners division, which controls around $4 billion in assets. The division deals mostly with private equity and venture capital types of investments and is focussed on long-short equity bets in Asia and other regions.

These closures come at a time when JP Morgan is reportedly telling its clients that it is predicting international stocks to outperform the domestic market for the rest of the year, despite the US stock market soundly outperforming emerging market stocks so far this year. The S&P 500 is up 7 percent year to date through Tuesday versus the iShares MSCI Emerging Markets ETF's (EEM) 9 percent decline in the same time period.

Pending a press release from Goldman Sachs about the shutting down of its two hedge funds, economists and analysts are left to speculate as to the causes for the closures. Overall, hedge funds have been performing poorly across the board. Part of the reason for the closure is the inconsistent demand for hedge-fund-like products during a period where the industry has struggled to outperform benchmarks and investors are looking at alternative options for outsized returns.

Recently, the hedge fund industry as a whole has struggled to grow. Clients placed a total of $9.8 billion in funds last year, the least amount since 1998, according to Hedge Fund Research. For three years running, the number of traders shutting down has outpaced those starting up.

This year, stock markets have been delivering weak returns, bond markets are performing negatively, and everything is, generally, much more volatile. From the uncertainty of Trump’s trade policy, to unforeseen global events like natural disasters, there is more uncertainty in the market than in recent years. Volatility among some of the most popular equities, a rising bull market with low net leverage, and unsuccessful bets of concentrated short positions have slowed the returns from hedge funds, according to a recent Goldman Sachs Portfolio Strategy Research report.

But, this is the environment that hedge funds say they’ve been waiting for. Hedge funds can profit in flat or down markets unlike mutual funds because most stock-investing hedge funds can bet against particular shares rather than just making bullish bets.

Despite this, the results from the first six months of the year are in, and they shatter the idea that hedge funds thrive in turbulent markets. Hedge funds, on average, underperformed the Standard & Poor’s 500-stock index yet again. An index of hedge fund performance, calculated by the research firm HFR, gained just 0.81 percent in the first half of 2018. That is less than half of the S. & P. 500’s 1.67 percent gain.