NASHVILLE, Tenn.–(BUSINESS WIRE)–Sept. 15, 2003–The Van Global Hedge Fund Index posted a 1.7% net gain in August, according to Van Hedge Fund Advisors International, Inc. (VAN), a leading hedgefund advisory firm. For year-to-date 2003, the Index has returned 10.8% net of fees. The Van Global Hedge Fund Index is one of the industry’s longest-running measurements of average hedge fundperformance. VAN states that the Index’s August results are based on the reported returns of over 900 hedge funds.
Excluding the performance of funds of funds (hedge funds which reinvest their capital into a portfolio of other hedge funds), the Index returned 1.8% net in August and 11.6% net year to date. Performance was equal between those hedge funds domiciled in the U.S. and those domiciled offshore last month as both the Van U.S. Hedge Fund Index and the Van Offshore Hedge Fund Index produced 1.7% net gains in August. U.S. funds have fared better for the year to date, however, as the U.S. Index has returned 11.7% net versus 10.3% net for the Offshore Index.
“Hedge funds continue to be attractive investment options for sophisticated investors,” stated George Van, Chairman of VAN. “August marks the sixth straight positive month for the Van Global Hedge Fund Index, with about 75% of funds reporting positive returns in August. Twelve of the fourteen major hedge fund strategies we track were profitable last month, with only Short Selling and Market Neutral Arbitrage averaging losses. The difficulties in the Market Neutral Arbitrage strategy can be attributed in large part to convertible arbitrage hedge funds, which have averaged losses each of the past three months. Market conditions have been unusually tough for those managers this summer.”
The best performing strategies for August were Emerging Markets, Aggressive Growth and Opportunistic, which returned 5.8% net, 3.5% net, and 3.1% net in the Global Index, respectively. All three strategies have benefited from improving equity markets this year. Short Selling fared the worst in August with a -3.5% net loss.
For year-to-date 2003, the best performing strategies are Emerging Markets, Aggressive Growth and Distressed Securities, which have gained 24.5% net, 20.2% net and 16.7% net in the Global Index, respectively. The only strategy with a negative year-to-date return is Short Selling, -17.7% net.
The Van Global Hedge Fund Index climbed to a value of 10,025.31 in August. The Index began with a value of 1,000 in January 1988. The Index has generated a net compound annualized return of 15.9% over its 15 year, 8 month history versus 12.0% for the S&P 500. Past performance of the Van Global Hedge Fund Index may be viewed at www.hedgefund.com.
Final August returns for the Van Hedge Fund Indices will be calculated at the end of September, based on a substantially larger sample of hedge fund returns. Those results will supersede the returns reported herein, should they differ. Final August returns will be posted at www.hedgefund.com.
As currently calculated, August and year-to-date 2003 hedge fund returns by strategy were as follows: <pre><br> Global U.S. Offshore<br> ————- ————- ————-<br> Aug. YTD Aug. YTD Aug. YTD<br> 2003 2003 2003 2003 2003 2003<br> —— —— —— —— —— ——<br>Aggressive Growth 3.5% 20.2% 3.9% 21.0% 2.6% 19.1%<br> —— —— —— —— —— ——<br>Distressed Securities 1.3% 16.7% 1.0% 15.2% 1.6% 17.9%<br> —— —— —— —— —— ——<br>Emerging Markets 5.8% 24.5% 4.6% 21.0% 6.2% 25.5%<br> —— —— —— —— —— ——<br>Income 0.2% 5.2% 0.8% 5.8% -0.8% 4.1%<br> —— —— —— —— —— ——<br>Macro 3.0% 9.8% 1.7% 8.7% 3.7% 10.5%<br> —— —— —— —— —— ——<br>Market Neutral – Arbitrage -0.2% 4.8% -0.2% 4.9% -0.2% 4.6%<br> —— —— —— —— —— ——<br>Market Neutral -<br> Securities Hedging 0.8% 4.1% 0.8% 3.8% 0.7% 4.2%<br> —— —— —— —— —— ——<br>Market Timing 1.2% 4.6% 1.5% 6.1% 0.5% 2.4%<br> —— —— —— —— —— ——<br>Opportunistic 3.1% 16.4% 3.6% 18.5% 2.5% 14.4%<br> —— —— —— —— —— ——<br>Several Strategies 2.9% 13.6% 3.3% 16.9% N/A N/A<br> —— —— —— —— —— ——<br>Short Selling -3.5% -17.7% -3.3% -16.5% -3.7% -19.2%<br> —— —— —— —— —— ——<br>Special Situations 1.3% 11.8% 1.5% 12.2% 1.0% 11.5%<br> —— —— —— —— —— ——<br>Value 2.1% 14.3% 2.0% 15.0% 2.2% 13.0%<br> —— —— —— —— —— ——<br>Van Hedge Fund Index<br>(ex Funds of Funds) 1.8% 11.6% 1.8% 12.1% 1.7% 10.8%<br> —— —— —— —— —— ——<br>Funds of Funds 1.1% 7.0% 0.9% 7.5% 1.3% 6.5%<br> —— —— —— —— —— ——<br>Van Hedge Fund Index 1.7% 10.8% 1.7% 11.7% 1.7% 10.3%<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 August Index as reported herein was created using a sample of 916 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.
