Greenwich Van Hedge Fund Index Extends Gains Through April

by Carla Johnson, Investors Offshore.com

17 May 2006

The Greenwich-Van Global Hedge Fund Index gained 2.23% in April with strong commodity markets and emerging markets continuing to be a key driver of hedge fund performance, Greenwich-Van Advisors LLC has reported.

According to Greenwich Van, more than 85% of the funds reported a positive return in April, and the index was up 8% year-to-date by the end of the month.

“Hedge Funds continued to rally in April as strong commodity markets and emerging markets contributed most to the aggregate Greenwich-Van index result,” noted Wade McKnight, Vice President of Greenwich-Van.

“The Futures Index was the top-performing index in April (5.92%, 9.46% YTD), while the Emerging Markets Index was the top-performing index on a year-to-date basis (4.00% in April, 14.03% YTD). The US equity market was subdued during the first half of April, but volatility picked up later in the month as the earnings season began. This and the continuing strong markets in Europe helped equity-based hedge fund strategies which returned 1.60% in April (8.64% YTD).”

In comparison, the S&P 500, MSCI World Equity Index and the Lehman Brothers Aggregate Bond Index returned 1.34% (5.61% YTD), 2.87% (9.19%) and -0.18% (-0.82% YTD), respectively in April.

By strategy group, the Directional Trading Group, comprised of futures, market timing and macro-oriented hedge fund strategies, gained 4.76 in April (8.05% YTD).

"Market conditions have remained favorable for managed futures and some macro hedge funds as trends in energy, base and precious metals have been persistent. Currencies, for the most part, remained low-key in April, while the fate of the US dollar should remain highly connected to the outcome of US interest rate increases," stated Greenwich Van's report.

The Greenwich-Van Global Futures, Market Timing and Macro indices gained 5.92%, 2.35%, and 2.34% in April.

The Specialty Strategies Group, comprised of emerging markets, income and multi-strategy hedge fund strategies, gained 2.65% in April (10.01% YTD). The Greenwich-Van Global Emerging Markets Index, the leading Index within this strategy group, returned 4.00% in April (14.03% YTD).

"Securities in the Russian, Chinese and Latin American geographical regions contributed most to the strength of this Index. Continued improvement in many countries’ fundamentals created new demand for emerging market securities. Investors’ increased appetite for risk also appeared to be an important factor. In the US ten-year treasury yields closed above 5% for the first time since the 2002 timeframe, as heavy selling put pressure on prices," the report explained.

The Long/Short Equity Group returned 1.60% in April (8.64% YTD). "Equity markets continued their upward trend in April, extending what has been a generally strong run in 2006. A surprisingly strong gross domestic product (GDP) report late in the month, combined with still benign inflation, also contributed to equity-based hedge fund returns," the report stated.

Greenwich-Van’s Global Value, Aggressive Growth, Opportunistic and Short Selling Indices returned 1.83%, 0.85%, 2.37% and -0.57%, respectively.

Meanwhile, the Market Neutral Group yielded 1.34% in April (5.83% YTD) as deal-activity and strong capital market activity continue to provide a safe haven for event driven managers. The convertible market in April remained structurally and technically healthy, the report noted.

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