Thu, Apr 17, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Greenwich Global Hedge Fund Index up 1% in December, 19.4% YTD

Wednesday, January 13, 2010
Opalesque Industry Updates - Hedge funds as measured by the Greenwich Global Hedge Fund Index (“GGHFI”) advanced during the month of December to close the year near all time highs. The GGHFI returned +0.97% while the Greenwich Composite Investable Index (“GI2”) advanced by +0.06% during the month, compared to global equity returns in the S&P 500 Total Return +1.93%, MSCI World Equity +1.69%, and FTSE 100 +4.28% equity indices. Yearto- date, the GGHFI and the GI2 returned +19.38% and +4.16%, respectively, while the S&P 500 Total Return, MSCI World Equity, and FTSE 100 Indices returned +26.45%, +26.96%, and +22.06%, correspondingly. 72% of constituent funds in the GGHFI ended the month with gains.

“The majority of hedge funds ended 2009 with excellent results. The average fund has traded near or above its high water mark of last year. Over a two-year period, the downside protection of hedge funds made them a substantially more rewarding investment than long-only funds and equity index products,” notes Clint Binkley, Senior Vice President.

Long/Short Equity managers were the best performing strategy group in December, gaining +2.28%. For the year, Long/Short managers added +23.35%, pacing the S&P 500 and outperforming the index by more than 20% over a 2 year period. Growth funds performed slightly better than Value managers in 2009, returning +28.93% and 24.82%, respectively. Short-biased funds lost (-14.91%) on average in 2009 but are still up more than 10% over a 2 year period.

Market Neutral funds gained +1.69% in December and +18.37% during the year. The Event Driven sector performed moderately better than Arbitrage funds as a whole, although pockets of the Arbitrage space enjoyed their best year on record. Convertible Arbitrage managers closed the year with a gain of +2.17% on the month and +49.42% for the year to become the best performing hedge fund sector during 2009. Fixed Income Arbitrage funds turned in a +22.22% gain during the year, moderately higher than the gain of +15.86% achieved by Other Arbitrage managers. Event Driven managers enjoyed a profitable December and advanced by +3.00%, driven by Distressed and Special Situations funds, which gained +2.97% and 4.24%, respectively. For the year, Event Driven and Distressed Securities funds advanced 300 basis points more than Long/Short Equity funds.

Directional Trading funds struggled in December as trend following strategies closed the books on a disappointing 2009. Futures funds lost -2.70% during the month and, along with Shortsellers, were the only hedge fund sector to finish with a loss for the year. Macro funds also experienced a slight loss of -0.42% during the month but still managed a return of +9.30% for the year.

Emerging Market funds advanced for their tenth straight month due to expanding production in China and other developing economies. These funds were the second best performing hedge fund sector during 2009, gaining over 42%. Fixed Income funds also moved higher, advancing by +2.30%. Finally, Multi-Strategy funds treaded water for the month and slightly trailed the GGHFI on the year, gaining +17.13%.

The GGHFI is one of the oldest benchmarks of the hedge fund universe. Final index results for December will be available mid-January, once additional funds have submitted returns. The GI2, comprising 40 constituent funds, adds investability, active management, and liquidity to the diversification and performance benefits of the broad Greenwich Global Hedge Fund Index. It references actual hedge fund vehicles as opposed to separately managed accounts or other methods used in an attempt to replicate the returns of hedge fund vehicles. The Investable Index has a correlation of 0.95 and beta of 0.94 to the GGHFI and is reported semi-monthly net of a 0.02% per period index calculation fee. Past performance and indices construction rules for all Greenwich Hedge Fund Indices may be viewed at www.greenwichai.com.

- FG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: European stock-picking fund up 19% YTD, bets on small caps’ high cash level[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Here is a European long/short equity fund that has been beating the odds since its 2008 inception by employing its own investment model, frequent company visits

  2. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  3. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  4. Opalesque TV: First Trust Advisors launches liquid alternatives platform[more]

    Bailey McCann, Opalesque New York: First Trust Advisors is launching a new liquid alternatives platform aimed at building on the companies existing alternative ETFs offering by adding hedged mutual funds. Senior Portfolio Managers Rob Guttschow and John Gambla recently sat down in an

  5. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo