NASHVILLE, Tenn.–(BUSINESS WIRE)–May 14, 2003–The Van Global Hedge Fund Index, a widely cited measure of worldwide hedge fund performance, gained 2.6% net of fees in April, its best month sinceJanuary 2001. According to Van Hedge Fund Advisors International, Inc. (VAN), a leading hedge fund advisory firm, the April return reflects the average performance of nearly 800 hedge funds. Over 80%of reporting funds were profitable for the month.
VAN also reports that hedge funds domiciled in the U.S., as measured by the Van U.S. Hedge Fund Index, posted an average net gain of 2.7% in April. The Van Offshore Hedge Fund Index, which reflects non-U.S. funds, earned 2.5% net of fees. The Global Index includes both U.S. and offshore-based hedge funds.
“April’s broad-based stock market rally was certainly a key contributor to hedge funds’ success last month,” stated George Van, Chairman of VAN. “U.S. equities had their best month since last fall as the war in Iraq was successfully concluded. Hedge funds tend to invest in stocks more than in other asset classes. Of course, hedge funds’ exposure to the market is tempered by short selling and other techniques. While short positions have really helped hedge funds thrive during the bear market, they diminished hedge fund gains in April. But we believe that short selling is always a useful tool for sophisticated money managers seeking to protect capital and reduce the volatility of returns.”
In fact, those hedge funds specializing in short selling were the only global strategy group to post a loss in April, -6.8% net. In 2002, Short Selling was the most successful of the fourteen strategies, gaining 29.2% net for the year while all the major stock benchmarks were negative.
For the year to date through April, the Van Global Hedge Fund Index has risen 3.3% net. In comparison, the S&P 500 and Average Equity Mutual Fund have gained 4.8% and 3.6% while the Dow Jones Industrial Average trails behind with a 2.4% return.
The best performing hedge fund strategies last month were Emerging Markets, Aggressive Growth, and Value, which posted net gains in the Global Index of 5.5%, 3.9% and 3.8%, respectively. Distressed Securities, which gained 3.1% net in April, has fared best for the year to date, returning 8.0% net.
The Van Global Hedge Fund Index climbed to a value of 9,345.62 in April. The Index began with a value of 1,000 in January 1988. The Index has generated a net compound annualized return of 15.7% over its 15 year and four month history. Past performance of the Van Global Hedge Fund Index may be viewed at www.hedgefund.com.
Final April returns for the Van Hedge Fund Indices will be calculated at the end of May, based on a substantially larger sample of hedge fund returns. Those results will supersede the returns reported herein, should they differ. Final April returns will be posted at www.hedgefund.com.
As currently calculated, April and year-to-date 2003 hedge fund returns by strategy were as follows: <pre><br> Global U.S. Offshore<br> ———– ———– ———–<br> Apr. YTD Apr. YTD Apr. YTD<br> 2003 2003 2003 2003 2003 2003<br>——————————— —– —– —– —– —– —–<br>Aggressive Growth 3.9% 2.5% 4.0% 2.4% 3.6% 3.1%<br>——————————— —– —– —– —– —– —–<br>Distressed Securities 3.1% 8.0% 2.7% 7.4% 3.5% 8.5%<br>——————————— —– —– —– —– —– —–<br>Emerging Markets 5.5% 6.0% 2.7% 2.9% 6.1% 6.7%<br>——————————— —– —– —– —– —– —–<br>Income 1.6% 3.5% 1.1% 3.2% 2.4% 4.1%<br>——————————— —– —– —– —– —– —–<br>Macro 2.6% 4.0% 2.7% 4.6% 2.5% 3.7%<br>——————————— —– —– —– —– —– —–<br>Market Neutral – Arbitrage 1.2% 4.1% 1.2% 4.4% 1.2% 3.7%<br>——————————— —– —– —– —– —– —–<br>Market Neutral -<br> Securities Hedging 1.1% 1.3% 1.2% 1.5% 0.9% 0.8%<br>——————————— —– —– —– —– —– —–<br>Market Timing 0.9% 0.0% 1.5% 1.0% 0.0% -1.2%<br>——————————— —– —– —– —– —– —–<br>Opportunistic 3.3% 3.6% 4.0% 3.7% 2.5% 3.6%<br>——————————— —– —– —– —– —– —–<br>Several Strategies 3.5% 5.3% 5.0% 5.9% N/A N/A<br>——————————— —– —– —– —– —– —–<br>Short Selling -6.8% -5.4% -6.5% -4.7% -7.2% -6.4%<br>——————————— —– —– —– —– —– —–<br>Special Situations 3.5% 4.1% 3.0% 3.7% 4.2% 4.9%<br>——————————— —– —– —– —– —– —–<br>Value 3.8% 3.2% 4.0% 3.8% 3.5% 2.3%<br>——————————— —– —– —– —– —– —–<br>Van Hedge Fund Index<br>(ex Funds of Funds) 2.6% 3.4% 2.7% 3.3% 2.6% 3.5%<br>——————————— —– —– —– —– —– —–<br>Funds of Funds 1.4% 2.1% 1.5% 2.4% 1.3% 1.8%<br>——————————— —– —– —– —– —– —–<br>Van Hedge Fund Index 2.6% 3.3% 2.7% 3.4% 2.5% 3.3%<br>——————————— —– —– —– —– —– —–<br></pre>
Van Hedge Fund Advisors International, Inc. (“VAN”) is a global hedge fund advisory firm which constructs hedge fund portfolios for international institutions and wealthy investors. VAN bases its work on its pioneering research on hedge funds begun in the early 1990s and by drawing on a hedge fund database which it believes to be the world’s largest.
The Company’s hedge fund index information is based on information received (and not audited or independently verified) from the hedge funds in an affiliate’s databases and may not be representative of all hedge funds. Hedge fund returns are net of fees and performance allocations. The timing of the deduction of such fees and performance allocations may affect the reported performance. The March Index as reported herein was created using a sample of 792 funds. Different statistics may be based on different numbers of funds. Averages are not dollar-weighted. Past results are not necessarily indicative of future performance. Average Equity Mutual Fund statistics are derived from Morningstar data.
