According to MSCI’s January 2003 Hedge Fund Indices Global Summary report, which offers a more detailed picture of MSCI’s already released performance data (See MSCI Hedge Fund Index Starts Year Higher ), small-cap equity hedge funds enjoyed an 8.6% and a 13.1% annual gain for the three-year and five-year periods as of January 31, 2003. Meanwhile, their counterparts focusing on mid and large-size companies pushed their way to 6.1% and 8.2% annual gains during the same time frame (See Small-Cap Equity Hedge Funds Elbowed Out Larger-Caps ).
From an asset-class perspective, 60% of funds and 49% of assets in the MSCI Hedge Fund Indices are stock-oriented, 8% of funds and 12% of assets are fixed income, while 22% of funds and 27% of assets are diversified among several asset classes. Some 32% of funds and 41% of assets are in mid and large-cap while 14% of funds and 10% of assets are small and mid-cap. The remainder have no capitalization focus, MSCI said
Unconfined Geographic Focus
The report said the MSCI Hedge Fund Composite Index is dominated by funds focusing on North America and funds that don’t confine their focus geographically. The strongest performance over the last 12 months came from developed market funds with a diversified geographic focus, gaining 15.6% in the year ending January 31 and 11.6% annually over the last three years. MSCI said funds focusing on European securities gained 11.9% over the year and 7.1% annually over the last three years as of January 31.
Also in the MSCI report, offshore-domiciled funds slightly outperformed US funds with a 1.3% and 1.2% gain respectively.