Investing November 10, 2003

Latin America Powers 2.87% October Hennessee Gain

November 10, 2003 (PLANSPONSOR.com) - Hedge funds produced a return of 2.87% in October on the strength of a Latin American strategy, according to the Hennessee Hedge Fund Index.
Reported by

The October performance brought the Hedge Fund Index’s year-to-date showing to 16.48% after a September gain (See Hennessee: Hedge Funds 1.01% Higher in September ).

According to a Hennessee news release, the Hennessee Latin America Index was the top-performer in October for the second month in a row, with an 11.03% return (a whopping 54% YTD). Investor demand remained strong in the region as Brazilian investors gained confidence in the notion that their nation’s lingering recession is over and the economy is on the verge of a modest recovery.

Following Latin America in the second spot for October was the Hennessee Technology Index, with a 5.30% return (13.93% YTD), driven by better than expected earnings news from tech bellwethers such as Cisco, Dell, Intel and Microsoft.

Continuing down the performance chart in third place was the Hennessee Telecom and Media Index, posting a return of 4.95% (28.16%YTD), as improved economic data and increased advertising budgets fueled a market rally, particularly in small-cap, high beta names, the Hennessee announcement said.

The worst performer for October was the Hennessee Short Biased Index, posting a loss of 5.94% (-20.81% YTD), as a strong market rally limited the number of declining stocks. The Hennessee Fixed Income Index followed was the second worst performing strategy in October, with a decline of -1.02% (+1.55% YTD). The equity rally led to a selloff in government bonds as investors retreated to stocks in order to participate. Additionally, high yield bonds reported a 2% jump as investors became less risk adverse.

At the third worst performer was the Hennessee Healthcare and Biotech Index, posting a return of +0.21% (+27.38% YTD), as HMO merger activity adversely affected shorts and the hospital sector was pulled down by hospitals struggling with more bad debt exposure than anticipated.

By comparison, the broad market indices advanced handily in October, with the S&P 500 Index gaining 5.65% (21.12% YTD) and the Dow Jones Industrial Average rising 5.67% (17.51% YTD). The NASDAQ Composite Index climbed 8.13% (44.69% YTD).

«