Hedge Funds Down More Than 1% In September

Investors Offshore, London

10 October 2002

While the average hedge fund fell an estimated -1.2% in September, hedge funds significantly outperformed the major stock market averages reports Van Hedge Fund Advisors. The S&P 500, the Dow and the NASDAQ each posted their worst month for the year to date, losing -10.9%, -12.3% and -10.8%, respectively. Short selling and Market neutral arbitrage strategy funds were the best performers.

The Van Hedge Fund Index, produced monthly, originally represented the industry's first benchmarking information based on a very large and representative sample. The Index shows returns monthly, by sector and style, for US hedge funds and Offshore funds separately, and also combined as a Global Index. The Company's database, which is used in construction of the Index, contains detailed information on over 3,400 hedge funds (2,000 US and 1,400 offshore). These funds represent about $182 billion of assets.

The Indexes are updated monthly based on returns received from contributing hedge funds. In addition to tracking net quarterly and/or net monthly returns over as many as 11 years on each fund, the database contains, for each fund, dozens of performance and non-performance variables which are intended to be useful to hedge fund investors. They include such characteristics as aggregate assets under management, extent of leverage, use of derivatives, and many others.

For 2001, the Van Hedge Index showed that the average US hedge fund earned 5.6% net while the Dow, S&P 500, and NASDAQ accumulated losses of –5.4%, –11.9%, and –20.8%, respectively. Offshore hedge funds, those domiciled outside the US, averaged an even stronger 7.0% net gain for the year.

The Van Hedge Fund Indices have been positive every year since their inception fourteen years ago in 1988. While few individual funds can claim such a track record, these indices show that, as an asset class, hedge funds have delivered superior returns in a variety of market conditions. In fact, since its 1988 inception, the Van US Hedge Fund Index has gained 954% net versus a 555% return for the S&P 500 over the same period.

Recommended