04/01/2004
The Van Global Hedge Fund Index gained 2.1 percent net of fees in January, according to industry consultant Van Hedge Fund Advisors International. According to VAN, the return represents the average January performance of over 800 hedge funds from around the world. The index also returned 2.1 percent when excluding funds of funds. The Van U.S. Hedge Fund Index, which includes only U.S.-domiciled hedge funds, returned 2.2 percent net for the month, while the Van Offshore Hedge Fund Index, which includes those funds based outside the U.S., rose 2.0 percent net.
About 86 percent of the January returns in the Van Global Hedge Fund Index were positive. Returns ranged from below negative 9 percent to over 22 percent. Hedge fund performance generally fell in line with that of the stock market in January, as the S&P 500 returned 1.8 percent and the Nasdaq rose 3.2 percent. About 44 percent of hedge funds in the Global Index outperformed the S&P 500.
VAN also announced an expansion of its long-running hedge fund indices with the addition of four new broad strategy group indices. The new strategy group indices are the market neutral group, the long/short equity group, the directional trading group and the specialty strategies group. VAN continues to produce index results for each of the individual strategies in addition to the new strategy groups. Constituent funds are equally weighted rather than asset-weighted in each of the indices. VAN found that some investors and investment managers are interested in seeing not just how narrowly defined hedge fund strategies perform but also how broader strategy groups, such as long/short equity, perform.
The long/short equity group performed best of the four strategy groups, returning 2.5 percent net in January. The market neutral group averaged 1.8 percent net for the month, while the specialty strategies and the directional trading groups returned 1.7 percent net and 1.1 percent net, respectively.
VAN also unveiled a futures strategy index as well as four arbitrage “substrategy” indices. The new futures strategy index returned 0.9 percent net in the January global index, reflecting the average performance of nearly 60 futures funds/commodity pools. Separate account composites are not included in the futures strategy index.