September Sees Improvement In Hedge Fund Returns

by Phillip Morton, Investors Offshore.com

11 October 2004

Early indications from two key hedge fund indices have revealed that hedge funds generally finished September in positive territory, ending several months of flat to negative returns.

According to preliminary results, the Van Global Hedge Fund Index, one of the longest-running benchmarks in the hedge fund industry, rose 1.7% net of fees in September, whilst the S&P Hedge Fund Index rose by a more modest 0.47%.

"It looks as if September was the best month for hedge funds since January," noted Van Global chairman, George Van.

"With the exception of short sellers, who bet against September's rising stock market, we're seeing gains across the spectrum among hedge fund managers,” he observed, adding that over three-quarter of the managers who have reported performance data for September were in positive territory for the month.

According to Van, much of this success has been attributed to a rebound in equity markets, although there remained some mixed fortunes for hedge funds in this domain; whilst the Van Global Index outstripped the S&P 500 Index, it was outpaced by the MSCI World Equity Index's 1.8% gain and the Nasdaq’s 3.2% increase.

On a year to date basis however, hedge funds remain slightly ahead of the equity markets. For the year through to September’s end, the Van Global Index was up 2.9% net whilst the S&P 500 was up 1.5% and the Nasdaq was down by 5.5%.

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