Hedge Funds Up Sharply in October

Date: Monday, November 27, 2006
Author: Riskcenter.com

The Greenwich-Van Global Hedge Fund Index (the "Index") returned +1.74% in October (+8.40% YTD), according to hedge fund index provider Greenwich-Van Advisors, LLC. Three of the firm's four major strategy groups have year-to-date returns of roughly +9% or higher.

"All hedge fund strategies followed by the firm, with the exception of short sellers, were up in October and have positive returns year-to-date," notes Ben Rossman, General Manager of the Database and Index Group. "Equities had a very good month, as investors were encouraged by strong corporate earnings and an improved outlook on inflation. Hedge funds captured October's equity upside, posting strong positive returns across strategies.

The October Index includes 1,069 funds. Final Index results will be calculated and posted at www.greenwich-van.com at the end of November after additional funds have submitted returns.

Strategy Group Summary

The Specialty Strategies Group, comprising emerging markets, income and multistrategy hedge funds, returned +2.33% (+11.47% YTD) in October. Emerging strategies led, up +3.13% (+14.26% YTD), amid continued strength in growth rates of emerging economies. The Greenwich-Van Global Multi-strategy and Income indices returned +1.65% (+8.81% YTD) and +0.63% (+7.28% YTD), respectively.

The Long/Short Equity Group returned +2.14% in October (+8.82% YTD) with all long-biased strategies benefiting from strong equity markets. Dedicated short sellers once again found themselves penalized by market direction. The Greenwich-Van Global Opportunistic, Value, Aggressive Growth, and Short Selling strategies, posted October returns of +2.66% (+9.42% YTD), +2.47% (+9.78% YTD), +2.15% (+7.52% YTD), and -4.72% (-4.87% YTD), respectively.

The Market Neutral Group gained +1.34% in October (+9.03% YTD). The Greenwich-Van Event-Driven, Equity Market Neutral, and Market Neutral Arbitrage strategies gained +1.86% (+10.11% YTD), +1.54% (+6.38% YTD), and +0.81% (+9.17% YTD), respectively.

The Directional Trading Group, comprising futures, market timing and macrooriented strategies, returned +1.07% in October (+2.96% YTD). Market Timing, Futures, and Macro-oriented strategies returned +1.49% (+6.85% YTD), +1.30% (+2.33% YTD), and +0.47% (+3.36% YTD), respectively.

Greenwich-Van Investable Index

The Greenwich-Van Investable Hedge Fund Index returned +1.39% in October (+7.0% YTD). The Investable Index, comprising 45 funds, adds investability, active management and liquidity to the diversification and performance benefits of the broad Greenwich-Van Global Hedge Fund Index. Since its inception in January 2003, the Investable Index has achieved an annualized return of +10.2% versus +11.2% for the Greenwich-Van Global Hedge Fund Index. Cumulatively from inception through October, it has gained +45.0% compared to +50.4% for the Global Index. Its correlation of 0.94 and its Beta of 0.90 to the Global Hedge Fund Index further demonstrate its ability to track the hedge fund universe.

The Investable Index is reported monthly net of a 0.04% Index calculation fee. Past performance and Greenwich-Van Hedge Fund Indices construction rules may be viewed at www.greenwich-van.com. Greenwich manages one of the world's largest hedge fund databases and is among the oldest providers of hedge fund indices and research to institutional investors worldwide.

The accuracy of information reported by managers is not audited or independently verified and may not represent all hedge funds. Greenwich does not necessarily perform due diligence on reporting managers. Hedge fund returns are net of underlying fees and performance allocations, the timing of which may affect reported performance. Averages are equally weighted. Past results are not indicative of future performance.