Greenwich Reports Positive Hedge Fund Performance In July

by Carla Johnson, Investors Offshore.com, London

14 August 2007

The Greenwich Global Hedge Fund Index posted positive performance of +0.13% in July according to a preliminary estimate released by Greenwich Alternative Investments, LLC. The Greenwich Investable Hedge Fund Index fell -0.74%, its first negative month since June 2006.

By comparison, the S&P 500, MSCI World Equity, and FTSE 100 were all negative in July, yielding -3.10%, -2.28%, and -3.75%, respectively. For the year, the GGHFI (+7.98%) and the GI² (+5.39%) were well ahead of, or on par with, year-todate equity performance of the S&P 500 (+3.64%), MSCI World Equity Index (+5.54%) and FTSE 100 (+2.25%). However, hedge funds have experienced a smoother ride than equity indices all of which have fallen into negative territory at least three out of the seven months this year.

"While difficult to predict the full impact on the markets associated with absorption of sub prime risks, this months hedge fund performance indicates the impact will likely be less significant than feared," notes Ben Rossman, Senior Vice President. "Of the funds that Greenwich tracks, those with direct exposure to such risks - inaccurate pricing of CDOs and other opaque instruments, tighter credit terms, potential reform to rating agency operations and the like - are estimated to represent less than ten percent of the hedge fund universe".

In July, dedicated short sellers took advantage of market conditions returning +4.51% for the month (+2.11% YTD). Long-biased equity managers demonstrated their ability to protect against down markets with roughly 85% of funds outperforming the S&P 500 in July. Emerging market funds continued to blaze ahead, ending up in July +3.27% and +16.89% for the year.

Thus far, the July Index includes 1,011 funds. Final Index results will be posted at www.greenwichai.com in early September, once additional funds have submitted returns.

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