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January 17, 2003 at 07:00 PM
NEW YORK (HedgeWorld.com)–Hedge funds returned 1.3% in December, according to preliminary data compiled by Morgan Stanley Capital International.
For the year, the MSCI Hedge Fund Composite returned 3.9%, also based on preliminary data for December and using backdated performance for MSCI’s index, which was launched last year with June’s returns. Final performance for November was revised slightly to 1.1% from preliminary returns of 1.2%.
The returns came while world equity markets were performing poorly. The Standard & Poor’s 500 stock index returned negative 5.9% in December and negative 22.1% in 2002. The MSCI World Equity Index returned negative 4.9% and negative 21.1% in the same respective periods. The MSCI World Sovereign Debt Index returned 5% in December and 19.6% in 2002.
The overall index returns were boosted by strong performance from managers in MSCI’s Directional Trading Index, which returned 5.1%. The Directional Trading index is made up of futures funds, global macro funds and other directional-focused funds. That category returned 13.1% in 2002. For November, the final performance number was negative 1%, a slight change from the preliminary results of negative 1.1%.
The MSCI Specialist Credit Index, which includes distressed and long/short credit funds, returned 1.9% in December and was up 4.2% for the year. Final November returns came in at 1.7%, down from preliminary returns of 1.8%.
