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Russia has been gold for hedge funds this year

Judging by the headlines, Russia may look like a nation in turmoil. Investors, though, don't seem to mind.

In fact, for hedge funds, Russia has been one of the biggest and best stories of 2015, turning in the only positive performance among all emerging market strategies and crushing the returns of traditional stock market indexes like the S&P 500.

The Russia/Eastern Europe Index returned 6.71 percent through August, according to the latest numbers from HFR, which tracks returns in the $3 trillion hedge fund industry.

This has come despite Russia's economy being in tatters, as gross domestic product contracted 4.6 percent in the second quarter. The nation has become a pariah on much of the global stage thanks to the conflict in Ukraine and its assistance to Syrian strongman Bashar Assad. Yet the investment returns pour in.

Moscow Russia currency
Andrey Rudakov | Bloomberg | Getty Images

By means of comparison, the S&P 500 had lost 6 percent for the comparable period (and is currently down nearly 7 percent year to date). Hedge fund strategies in total, as gauged by the HFRI Equity Hedge Index, are off 0.33 percent.

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Only the HFRI Technology/Health Care (up 6.82 percent) and the Japan (up 6.77 percent) indexes have topped Russia this year, and just barely.

The Russia gain reverses a string of weak prior-year performances, with a decline of 25.9 percent in 2014 and a gain of just 4.4 percent in 2013, a year during which the S&P 500 jumped some 32 percent.

Compared with other emerging market strategies, Russia also shines. The next-best performer was China, which was off 0.56 percent for the year, while the Latin America index was the worst of the group, down 14.21 percent.

To be sure, there could be trouble ahead. S&P's Russia BMI Index has tumbled 4.4 percent over the past month, underperforming the 3.8 percent return from S&P's global index. Still, the Russian index outperformed the global ex-U.S. index, which declined 4.6 percent, and is up 3.7 percent year to date, compared with the 8.2 percent decline in the global benchmark and the 9.5 percent drop in the global ex-U.S. measure.

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Though its success earlier in the year had been attributed to a rising ruble and firming oil prices, Russia has maintained its dominance even as those two trends have reversed. The country's hedge fund index was up 5.17 percent and 4.36 percent in the first two quarters of 2015 respectively.

It's also not just in hedge fund strategies where Russia has been doing well. A light-volume exchange-traded fund that invests in the nation also has had a strong year.

The SPDR Russia fund, a $22.9 million fund that tracks the S&P Russia Capped BMI Index, has outperformed the stock market as well, with a 3.4 percent year-to-date return. Investors, nonetheless, have pulled a net $810,000 from the fund this year, according to ETF.com.