Hedge Funds Slip in June

July 5, 2002 (PLANSPONSOR.com) - The Average US Hedge Fund lost ground in June but still outperformed major US equity benchmarks, according to a preliminary report from Van Hedge Fund Advisors International.

The global hedge fund advisory firm says that US hedge funds averaged a 2.2% net loss in June, based on a preliminary report.  The loss comes after gains reported in the prior three months, according to Van Hedge.

However, that was better than major US equity indexes during June, a rough month for stocks.  During that period, the S&P 500 lost 7.25%, the Dow was down 6.87%, and the Russell 2000 ended the month 5.09% lower.  The NASDAQ ended the month 9.44% lower than it began the month.

“Short” Stuff

As a result, it was not surprising that the best performing hedge funds were short sellers, which benefit from falling stock prices, and Income, which focus on non-equity securities.

“June was not an easy month for portfolio managers as the mood on Wall Street turned increasingly bearish,” said Steven A. Lonsdorf, CEO of VAN. “Even though most of the hedge funds we’ve heard from so far posted a loss last month, it appears their hedged strategies were successful in minimizing the impact of the sell-off. Close to 90% of reported June hedge fund returns are better than the S&P 500.”

Final June, second quarter, and year-to-date 2002 results for the Van Hedge Fund Indices, detailing the average performance for U.S., Offshore and Global hedge funds by strategy, will be released later this month by the Nashville, Tennessee-based Van Hedge Fund Advisors.

The Company’s hedge fund index information is based on returns received (and not audited or independently verified) from the hedge funds and may not be representative of all hedge funds.