Offshore hedge funds performed even better than their domestic counterparts, averaging a 7% net gain for the year.
In comparison, in 2001:
- the Dow Jones Industrial Average lost 5.4%
- the S&P 500 fell by 11.9%
- the Nasdaq composite fell by 20.8%.
In addition, the Van US Hedge Fund Index:
- advanced 1.6% net in December
- increased by 6.0% net over the fourth quarter.
Similarly, the Van Offshore Hedge Fund Index:
- rose 1.3% net last month
- to end the fourth quarter up 4.8%.
For December, the best performing strategies were:
- Offshore Emerging Markets, increasing by 5.1%
- US Emerging Markets, up by 4.6%
- US Aggressive Growth, which tied with Offshore Special Situations with a return of 2.9%.
Over the fourth quarter of 2001:
- Offshore Emerging Markets funds led with an average 17.0% net gain
- Technology sector funds, which rallied over the quarter, increasing by 14.2%
- US Emerging Markets funds, which rose by 13.8%.
Over 2001, the most successful hedge fund strategies were:
- US Distressed Securities – funds that invest in ailing companies, which rose 16.1%
- Offshore Short Selling – funds that bet on falling stock prices, which increased by 15.8%
- US Emerging Markets, which managed a 15.7% return.