December is traditionally a strong month for hedge funds and this year was no exception as roughly 85% of the hedge funds in the Index had returns in the black for the month. Overall, returns in 2003 represent the 16 th consecutive year of positive returns for the hedge fund measure , according to preliminary results announced by Van Hedge Fund Advisors International.
From the inception of the Van Global Hedge Fund Index in 1988 through December 2003, the Index has produced a compound annualized return of 16%. “Hedge funds had their best year in 2003 since 1999,” stated George Van, Chairman of Van. “I think investors can be pleased that hedge funds generally lived up to expectations in preserving capital through the lean years of the bear market and then returning to double-digit gains as conditions improved in 2003.”
However, the broader markets outperformed the Index for the year. The S&P 500 ended 2003 with a 28.7% gain while the NASDAQ rose 50.8%.
An updated December Van Index, based on a larger sample of funds, will be released in mid-January. Final results for December will be available at www.hedgefund.com at the beginning of next month.