Hedge Funds Get Off To Flying Start In 2006

by Phillip Morton, Investors Offshore.com

08 February 2006

Hedge funds have gotten off to a flying start in 2006, propelled by gains in global equity markets, particularly in emerging markets, according to a preliminary report by Greenwich-Van Advisors, LLC, a leading hedge fund index provider.

The report revealed that the Greenwich-Van Global Hedge Fund Index gained 3.5% in January comparing this with a 2.7% return from the S&P 500 during the month.

Meanwhile, the Morgan Stanley Capital International World Equity Index returned 4.4%, while the Lehman Brothers Aggregate Bond Index was flat.

"Strong global equity indices propelled most hedge funds higher during the first few weeks of 2006," noted Wade McKnight, Vice President of Greenwich-Van.

He went on to observe that: "Emerging market managers remain frontrunners, as was the case in 2005, returning 7.1%. The second strongest hedge fund strategy in January, with a preliminary return of 5.3%, was the Aggressive Growth long/short equity strategy group. This strategy could perform very well in 2006 if the so-called 'January Barometer' holds true."

"Short Selling managers, not surprisingly, generated the worst showing of -4.7%," added Mr McKnight.

The Index represents average performance, net of fees, of hedge fund managers reporting to Greenwich-Van. It has shown gains over each of the last 17 calendar years and has produced a compound annualized return of 15.7% net.

The January 2006 Greenwich-Van Global Hedge Fund Index preliminary results included 426 funds. An updated January return for the Index, based on a larger sample of funds, will be released in mid-February.

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