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Alternative Market Briefing

Australian Fund Monitors Hedge Fund Index outperforms equities in last twelve months

Monday, July 02, 2012

Benedicte Gravrand, Opalesque Exclusive:

June 30th is the end of the financial year in Australia, and the last trading day is today. However, Australian investors who invest equities may find it difficult when looking at realised gains, as listed equities have not done so well, reports Chris Gosselin in the latest Australian Fund Monitors Pty Ltd release received by Opalesque.

Indeed, the ASX200 went down around 10.70% in the last 12 months, and down almost 40% since early November 2007. The major Australian stock market index is currently at around 4,094, down 1.3% YTD. (Historically, from 1992 until 2012, the S&P/ASX 200 averaged 3445, reaching an all time high of 6828 in November 2007, and a record low of 1358 in November of 1992, according to Trading Economics.)

This compares to the Australia Fund Monitors (AFM) hedge fund index of all funds, which fell 1.7% (est.) over the past 12 months (after losing 2.6% (est.) in May 2012), but is up around 7% since November 2007 (assuming June performance is in line with the market). Apparently, from January 2003 to December 2011, AFM’s index of equity hedge funds (excluding Fund of Funds) provided an annualized return of 17%.

"At a time when much of the smart money is heading for the safety of cash or term deposits......................

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