Bush Victory Brings New Opportunities As Hennessee Reports Positive Hedge Fund Performance

by Carla Johnson, Investors Offshore.com

15 November 2004

The hedge funds in the Hennessee Hedge Fund Index produced a return of 0.69% during October, bringing year to date gains to 3.3%, and the firm expects a Bush victory to throw up new trading opportunities for fund managers.

Hennessee noted that the broad equity indices continued to lack direction in October, with the S&P 500 gaining 1.53%, the Dow Jones Industrial Average slipping 0.52% and the Nasdaq 100 climbing 4.12%.

However, Hennessee forecasts that trading opportunities will emerge in the fourth quarter of 2004 as markets react to the re-election of George W. Bush to the White House.

“Our research conversations with hedge fund managers indicate they believe…a Bush victory was positive for stocks, but negative for bonds,” stated Charles Gradante, Managing Principal of Hennessee Group.

However, Gradante added that any near term rally in the equities market is likely to be short-lived.

The top performing sector in the Hennessee index last month was the Telecom and Media Index, which gained 2.05%. This was followed by the Hennessee Macro Index, gaining 1.8% and the Distressed Index, up 1.64%.

Meanwhile, the worst performing strategy last month was the Short Biased Index, losing 1.07%, with Convertible Arbitrage also posting a negative 0.41% return.

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