Greenwich Van Hedge Fund Idex Beats S&P 500 In 2005

by Phillip Morton, Investors Offshore.com

20 January 2006

Greenwich-Van has reported that its Global Hedge Fund Index gained 1.5% in December as the index beat both major US bond and stock indices over the course of 2005.

Greenwich Van said Wednesday that its hedge fund index gained 8.5% in 2005, which compares with a 4.9% gain in the S&P 500 index and a 2.5% increase in the Lehman Brothers Aggregate Bond index over the year.

According to Wade McKnight, Vice President, the Greenwich-Van has generated a net compound annualized return of 15.5% over its 18-year history. This compares with a 12.0% return for the S&P 500 over the same timeframe.

"This strongly suggests downside protection and diversification benefits of hedge funds within a comprehensive asset allocation plan can greatly enhance a portfolio's reward/risk profile," Mr McKnight observed.

The December 2005 Greenwich-Van Hedge Global Hedge Fund Index returns are based on the reported returns of 972 funds. Final Index returns will be published at the end of January after additional funds have submitted returns.

Greenwich Van's figures suggest that equity-based strategies performed particularly well last month, as did emerging market funds. This reflects annual performance data which shows that long/short equity strategies returned on average 10.9% in 2005, while emerging markets returned 16.8% on average.

However, the preliminary data indicated that short-selling equity funds performed poorly in December, as did futures funds, with both having lost money.

The only strategy to have lost money over the course of 2005 was convertible arbitrage.

Meanwhile, the Greenwich-Van Composite Investable Hedge Fund Index, comprised of 45 funds, gained 1.0% in December and ended 2005 up 5.0%.

Since its inception in January, 2003, the Investable Index achieved an annualized return of 10.7% versus 11.4% for the Greenwich-Van Global Hedge Fund Index.

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