NASHVILLE, Tenn.–(BUSINESS WIRE)–June 13, 2003–The Van Global Hedge Fund Index, a widely cited measure of worldwide hedge fund performance, rose 3.4% net of fees in May, increasing itsyear-to-date return to 6.7% net. According to Van Hedge Fund Advisors International, Inc. (VAN), a leading hedge fund advisory firm which produces the Index, the May return is based on just over 800reporting hedge funds. That figure includes both single-manager hedge funds as well as funds of funds; excluding funds of funds, the Index gained 3.5% net in May and 7.0% net year to date.
VAN reports that the Van U.S. Hedge Fund Index, which measures the performance of the average U.S.-domiciled hedge fund, gained 3.9% net of fees in May. The Van Offshore Hedge Fund Index, based on hedge funds domiciled outside the U.S., made 3.0% net for the month. Excluding funds of funds, the U.S. and Offshore Indices returned 3.9% net and 3.1% net, respectively.
“Hedge funds had their best month in May since August 2000, when the Van Global Hedge Fund Index earned 4.3%,” stated George Van, Chairman of VAN. “It’s encouraging to hedge fund investors to see that this investment class is continuing to do well, even as the market seems to be shifting. Hedge funds successfully weathered the stormy markets of the last few years and they’re also participating in this spring’s market rebound. Gains were widespread among hedge funds in May, with about 88% posting positive results. In fact, Short Selling was the only strategy to show a loss out of the fourteen we track in our indices.”
The best performing strategy in May was Aggressive Growth, which gained 9.3% net in the Global Index. These funds primarily follow a long/short equity approach, concentrating on growth-oriented companies, many of which are listed on the NASDAQ. Other notable strategies for the month include Emerging Markets and Opportunistic, which generated Global Index returns of 5.0% net and 4.9% net, respectively.
Thanks to their strong May showing, Aggressive Growth funds are also the best performers for the year to date with a 12.4% net return in the Global Index. Following closely behind are Distressed Securities, at 11.0% net, and Emerging Markets, at 10.9% net.
The Van Global Hedge Fund Index climbed to a value of 9,653.95 in May. The Index began with a value of 1,000 in January 1988. The Index has generated a net compound annualized return of 15.8% over its 15 year and five month history. Past performance of the Van Global Hedge Fund Index may be viewed at www.hedgefund.com.
Final May returns for the Van Hedge Fund Indices will be calculated at the end of June, based on a substantially larger sample of hedge fund returns. Those results will supersede the returns reported herein, should they differ. Final May returns will be posted at www.hedgefund.com.
As currently calculated, May and year-to-date 2003 hedge fund returns by strategy were as follows: <pre><br> Global U.S. Offshore<br> ———— ———— ————<br> May YTD May YTD May YTD<br> 2003 2003 2003 2003 2003 2003<br>——————————- ———— ———— ————<br>Aggressive Growth 9.3% 12.4% 9.7% 12.8% 8.3% 11.7%<br>——————————- ———— ———— ————<br>Distressed Securities 2.9% 11.0% 2.6% 10.1% 3.3% 12.0%<br>——————————- ———— ———— ————<br>Emerging Markets 5.0% 10.9% 3.1% 8.2% 5.4% 11.5%<br>——————————- ———— ———— ————<br>Income 1.9% 5.7% 2.4% 6.3% 1.3% 5.2%<br>——————————- ———— ———— ————<br>Macro 4.6% 7.1% 5.6% 9.5% 3.9% 5.7%<br>——————————- ———— ———— ————<br>Market Neutral -<br>Arbitrage 1.0% 5.0% 1.0% 5.4% 0.9% 4.5%<br>——————————- ———— ———— ————<br>Market Neutral -<br>Securities Hedging 0.8% 1.9% 0.4% 1.2% 1.1% 2.3%<br>——————————- ———— ———— ————<br>Market Timing 2.1% 2.5% 2.8% 3.6% 0.9% 1.0%<br>——————————- ———— ———— ————<br>Opportunistic 4.9% 8.9% 5.5% 9.9% 4.3% 8.1%<br>——————————- ———— ———— ————<br>Several Strategies 4.8% 9.6% 5.7% 12.2% N/A N/A<br>——————————- ———— ———— ————<br>Short Selling -6.6% -11.1% -6.7% -10.2% -6.6% -12.6%<br>——————————- ———— ———— ————<br>Special Situations 3.5% 7.2% 3.7% 7.4% 3.3% 7.2%<br>——————————- ———— ———— ————<br>Value 4.5% 7.7% 4.6% 8.2% 4.4% 6.9%<br>——————————- ———— ———— ————<br>Van Hedge Fund Index<br>(ex Funds of Funds) 3.5% 7.0% 3.9% 7.4% 3.1% 6.5%<br>——————————- ———— ———— ————<br>Funds of Funds 2.9% 5.2% 3.3% 6.0% 2.7% 4.6%<br>——————————- ———— ———— ————<br>Van Hedge Fund Index 3.4% 6.7% 3.9% 7.5% 3.0% 6.1%<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 April Index as reported herein was created using a sample of 803 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.
