Early Reports Show MSCI Hedge Fund Index Makes Small Gain

by Carla Johnson, Investors Offshore.com

15 July 2004

Early reporting funds in the MSCI Hedge Fund Composite Index returned a positive 0.3% for the month of June, the group announced on Tuesday.

Capitalising on a firmer equity market, the MSCI World Equity Index increased by 2.1% in June while the MSCI World Sovereign Debt Index remained flat for the month, returning 0.0%.

Of the five Process Group Indices that make up the Composite Index, the best performer was the Specialist Credit Index, returning 1.3% last month. These funds seek to lend to credit-sensitive institutions.

Also in positive territory is the MSCI Security Selection Index, which rose by 1.1% in June. Security Selection managers combine long positions and short sales with the aim of benefiting from their ability in selecting investments while offsetting systematic market risks.

The worst hit over the course of last month was the Directional Trading Index, where managers speculate on the direction of market prices of currencies, commodities, equities, and bonds in the futures and cash markets. This strategy lost 1.6% in June.

Meanwhile, the Relative Value Index and the Multi Process Group Index lost 0.3% and 0.7% respectively.

The MSCI Hedge Fund Composite Index gained 14.7% in 2003, and is up 1.8% year to date in June.

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