Hennessee Hedge Fund Index Post Gains In March

by Carla Johnson, Investors Offshore.com

15 April 2004

Funds in the Hennessee Hedge Funds Index posted a small 0.29% gain in March, bringing year to date performance to a positive 3.35% return, although the firm warns that the near future may bring more volatility in the markets.

The Hennessee Latin America Index was the top-performing index in March returning 3.73% (2.07% year to date), showing a complete reversal from the previous month when it was the worst-performing index. The improvement was attributed mainly to a deal between Argentina and the IMF, preventing a large scale default.

The next best performer was the Hennessee International Index which returned 2.20% in March, and was up 6.60% on the year. This was followed by the Pacific Rim index, returning 2.25% on the month, and 6.47% year to date.

Meanwhile, the worst performing index was the Hennessee Short Biased Index, posting a loss of 4.31% and down 3.55% year to date. The Telecom and Media Index also performed poorly, losing 3.52% in March and down 1.89% year to date. The Technology Index posted a loss of 2.22% for last month.

“The Fed’s easy monetary policy has driven reflation trades into excessive concentration and leverage. This may be the precursor to more volatility and risk in the markets, on the level of 1994,” observed Charles Gradante, managing principal at Hennessee.

“Many hedge fund managers believe strong productivity is masking the spread of inflation, and consequently the Fed may be falling behind the curve. However, near-term, hedge fund managers generally believe equities offer good value when comparing forward earning yields for equities versus bond yields,” added Mr Gradante.

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