NASHVILLE, Tenn.–(BUSINESS WIRE)–Dec. 3, 2003–Van Hedge Fund Advisors International, Inc. (VAN) announced today a preliminary November return for the Van Global Hedge Fund Index of 1.1% net offees. The Index has gained 15.7% net for the year to date through November. The Index reflects the average net return of hedge funds worldwide that report to VAN and is a commonly used benchmark forthe industry. The preliminary November index is based on over 300 hedge fund returns.
November hedge fund performance was comparable to that of the U.S. equity market. The Van Global Hedge Fund Index outpaced the S&P 500 and Dow Jones Industrial Average, which gained 0.9% and 0.1% respectively, although it trailed the NASDAQ Composite’s 1.5% return for the month. Just over half of the hedge funds included in the Index reported a November net return greater than the S&P 500.
“This year is proving to be one of the most consistently positive years ever for the Van Global Hedge Fund Index,” stated George Van, Chairman of VAN. “So far, the Index has had only one losing month in 2003, when it fell -0.1% net in February. Hedge fund managers continued to reward investors in November, with Distressed Securities and Value strategy funds again showing some of the best results.”
For the year to date, hedge funds have not kept pace with the rebounding stock market. The S&P 500 has risen 22.3% through November while the NASDAQ has experienced a 47.4% increase. Many hedge funds have seen their gains this year diminished somewhat due to losses on short positions as equities have posted dramatic gains since March.
However, hedging tactics such as short selling have served hedge funds well over time, resulting in considerably less volatile performance than that of stocks. Many hedge funds state capital preservation as a primary goal and seek to produce gains in a variety of market conditions rather than aiming to simply generate returns that closely match the broad markets. For instance, the Van Global Hedge Fund Index has never posted a losing year since its 1988 inception, while the S&P 500 has fallen in four of those years.
From the inception of the Van Global Hedge Fund Index through November 2003, the Index has produced a compound annualized return of 15.9%. The Index is based on hedge fund performance after the deduction of hedge fund fees and expenses. Historical performance of the Index may be viewed at www.hedgefund.com.
An updated November Van Index, based on a larger sample of funds, will be released in mid-December; final results for November will be available at www.hedgefund.com at the beginning of next month. Mid-month and month-end versions of the Van Hedge Fund Indices show hedge fund performance on a global, a U.S. and an offshore basis, as well as by individual investment strategy.
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. Different statistics may be based on different numbers of funds. Averages are not dollar-weighted. Past results are not necessarily indicative of future performance.
