Investable indices are reporting the best month of returns in years for January. The Credit Suisse/...
Investable indices are reporting the best month of returns in years for January.
The Credit Suisse/Tremont hedge fund index was up 3.2% in January, its best monthly return since August 2000, with all but one of its 13 underlying strategies - dedicated short bias - posting positive returns.
This is a continuation of a strong month in December, when only short-sellers and CTAs posted negative returns on the index.
The best performers of the month were emerging markets funds, with 5.76% for the month, equity long/short funds, with 4.18%, and multi-strategy event driven with 3.32%.
Convertible arbitrage managers, delivering 2.75%, had their best month in three years on this index.
The Greenwich Van Global Hedge Fund index, comprising 930 funds, had its best month since May 2003, gaining 2.4%. 90% of the funds reporting to it posted positive returns for the month, it said.
Van's best strategy was long/short, with 4% returns. Specialty strategies, incorporating emerging markets and fixed income funds, delivered 3.9%, market neutral delivered 2.3% and directional traders posted returns of 2.7%.
Short sellers lost money on Van's index, losing 2.9%, compared to a loss of 2.98% on the Tremont index.
Both index providers cited strong equity markets or equity market volatility as key reasons for the successful month.
Oliver Schupp, president of the Credit Suisse Tremont Index LLC and senior member of the Credit Suisse Funds and Alternative Solutions Group, said: "Hedge funds continued their strong performance from December into January. The global appetite for risk and strong equity markets pushed the long/short sector up 4.18% and the emerging markets sector up 5.76% for January 2006.
"Convertible arbitrage managers reported a performance of 2.75%, the strongest in three years. The managers profited from higher valuations and increased inefficiencies after a year of numerous fund closures in 2005."
Robert Schulman, chief executive of Tremont Capital Management, added: "Event-driven hedge fund managers had one of their strongest months in recent history, taking advantage of a tightened credit spread throughout the month and an increase in announced mergers and acquisitions after the start of the new year.
"Global macro managers started the year strong, reporting 3.37% for January. They were able to generate returns through long equity exposure as well as from short positions in European and Japanese bonds."
Performance for the Credit Suisse/Tremont Hedge Fund Index and its 10 sub-strategies are calculated monthly.
Investable indexes are reporting the best month of returns in years for January
The Credit Suisse/ Tremont hedge fund index was 3.2% in January
Top performers for the month were emerging markets funds
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