Van Index Returns For November Herald Good Month For Hedge Funds

by Phillip Morton, Investors Offshore.com

08 December 2004

The Van Global Hedge Fund Index produced a net gain of 2.4% last month, making November potentially the best month for hedge funds in terms of performance during 2004.

"Nine out of every ten funds included in our November Index had a positive return, the highest rate we've seen in quite some time,” commented George Van, Chairman of Van Hedge Fund Advisors International, noting that a strong post-election bounce in the equity markets was largely responsible for the improved returns.

Van added: “With the exception of short sellers, we're seeing positive performance across all strategies. The 2.4% net gain for the Index this last month represents the best month that hedge funds have had since October of last year."

Nevertheless, hedge funds did not fully participate in November's stock market run-up, largely due to their short positions and exposure to other asset classes, according to Van.

The S&P 500 gained 4.0% last month, a mark about 22% of the funds in the preliminary November Van Global Hedge Fund Index surpassed. Meanwhile, the MSCI World Equity Index and the Dow Jones Europe Stoxx 50 posted gains of 5.1% and 5.8%, respectively.

Still, the Van Global Hedge Fund Index, with its year-to-date net return of 5.8%, has outpaced some of the major equity benchmarks this year, including the NASDAQ and the Dow, which have gained 5.1% and 1.7% for the year to date, respectively.

Although the Van Index appears unlikely this year to match its 18.6% net gain of last year, it is expected to end this year well ahead of its 2002 loss of -0.3% net and it may eclipse its 2001 gain of 6.2% net.

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