Early Data Shows Hedge Funds Posted Positive Returns In June

by Carla Johnson, Investors Offshore.com

12 July 2004

After two months of disappointing hedge fund performance, a preliminary report by hedge fund advisors Van Global indicates that the Van Global Hedge Fund Index posted a modest 0.6% gain in June.

"After two negative months in April and May, early indications are that hedge funds recovered a bit in June. Over half of the hedge funds that have reported to us so far were positive for the month.” noted George Van, Chairman of VAN.

Hedge funds were again outperformed by the major equity indices last month. While the S&P 500 and MSCI World Equity Index both gained 1.9% last month, the NASDAQ rose 3.1%. Year to date, the Van Global Hedge Fund Index gained 2.2% net while the S&P 500, MSCI World Equity Index and NASDAQ returned 3.4%, 2.5%, and 2.4%, respectively.

VAN points out that hedge funds are usually outperformed by equities in bull markets due to their hedged nature and exposure to a diverse array of asset classes.

George Van continued: "Long/short equity hedge funds were generally profitable but Convertible Arbitrage strategy funds look as if they had another difficult month. Short Selling was one of the worst performing strategies in June as those managers faced broad-based gains among equities."

The 0.6% overall gain for June represents the average net performance of more than 300 hedge funds. Performance drops to 0.5% when funds of funds are excluded.

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