West Palm Beach (HedgeCo.net) – Hedge funds measured by both the Greenwich Global Hedge Fund Index ("GGHFI") and the Greenwich Composite Investable Index ("GI2") significantly outperformed equity indices despite posting their greatest losses since August 1998 during September.

"It was a perfect storm for both credit/equity markets and hedge funds in September," said Thomas Whelan, Greenwich CEO, "The already deflated values of financial firms provided the perfect trap for value investors while government intervention limited the ability of hedge funds to effectively mitigate their risk. Simultaneously, the continued freezing of credit markets combined with investor redemptions forced fixed-income funds to liquidate or otherwise mark down assets at depressed prices. The results of the market turmoil and unpredictable regulatory environment are evident in their returns this month."

Long/Short Equity managers fared better than both US and foreign equity markets during the month, but still were subject to unpredictable market movements, losing -6.69%. Both Growth and Value funds struggled to find profitable trades, returning -8.16% and -7.05%, respectively. Short Selling managers by contrast enjoyed their most profitable month this year, advancing +9.27% on average. Year-to-date, Short Selling funds have gained 17% and remain the best performing subsector of hedge fund strategies.

Market Neutral funds were not immune to market forces during September, as they felt the effects of dysfunctional credit markets, declining -4.49%.

Despite the marked weakness in hedge funds in September, not all hedge fund strategy groups moved lower for the month. Directional Trading funds advanced by +0.51% on average, led by Futures managers who capitalized on declining commodity values. Macro managers did not fare as well, losing -3.62% on the month.

Specialty Strategy managers were the weakest performing strategy group for the month of September, with funds losing -7.33% on average. Emerging Markets funds were once again the main reason behind the losses as these managers shed nearly 10% during the month.

Alex Akesson

Editor for HedgeCo.Net
Email: alex@hedgeco.net

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West Palm Beach (Hedgeco.net)- The Greenwich Global Hedge Fund Index(GGHFI)reported May returns of +2.01% while the Greenwich Composite Investable Index returned +1.66%. The May Index currently includes 1345 constituent funds.

By comparison, the S&P 500 showed gains of +1.29%, while MSCI World Equity and FTSE 100 indices posted returns of +1.11% and -0.56%.

"Across the board, hedge funds performed well in May. But the real story is told when comparing year-to-date performance," notes Margaret Gilbert, Managing Director. "Hedge funds are positive for the year compared to the major equity indices which still remain negative."

For the second month in a row, Long/Short Equity managers were the best performing strategy group, posting a gain of +2.35%. Directional Trading managers, the best performing strategy group so far this year, exhibited another strong month, returning +2.00%.

Specialty Strategy managers were the second-best performing strategy group, returning +2.10% on average. The Market Neutral Group averaged +1.39% on the month as Event Driven managers continued to find opportunities in uncertain markets.

Editing by Alex Akesson
Email: alex@hedgeco.net

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