Van Hedge Fund Index Suffers October Reversal

by Phillip Morton, Investors Offshore.com

08 November 2005

Hedge funds tracked by the Van Global Hedge Fund Index (VGHFI) gave back some of their recent gains during the month of October, as the index slipped by 1.1%, according to a preliminary report released today by Van Money Manager Research, LLC.

"Hedge funds retraced some of their gains from the late spring and summer months," notes Kevin Campbell, Vice President of VAN.

"Most of the losses occurred in the first half of the month when inflation concerns dominated the markets. The Consumer Price Index ("CPI") rose 1.2% in September, the largest increase in US consumer prices in more than 25 years. Positive economic news at the end of the month (strong 3rd quarter GDP, falling oil prices, and strong manufacturing reports) lessened the blow of what was otherwise a poor month for hedge funds," Mr Campbell observed.

However, hedge fund losses were generally smaller than those suffered by some of the major equity benchmarks, including the S&P 500, which was down 1.7% in October, the Morgan Stanley Capital International World Equity Index, which fell 2.5%, and the Dow Jones Europe Stoxx Index, which declined by 2.2%. The Nikkei 225, meanwhile, gained 0.2%. The Lehman Brothers Aggregate Bond Index fell -0.8%.

An updated October return for the Index, based on a larger sample of funds, will be released by VAN in mid-November.

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