NEW YORK (HedgeWorld.com)–Hedge funds returned 14.7% in 2003 following strong returns of 1.8% in December, according to preliminary results for the MSCI Hedge Fund Composite Index.
Just about all MSCI hedge fund categories, called process groups, performed well in 2003 with arbitrage, merger arbitrage and statistical arbitrage funds being the exception. Those funds, collectively called relative value funds by MSCI, returned 6.7% in 2003 and were up just 0.3% in December.
The best performing MSCI process group index in 2003 was the MSCI Specialist Credit Index, which returned 23.4%. That index, composed of distressed, long/short credit and private placement funds, returned 2.2% in December, while November’s final returns were 1.5%. (Preliminary November returns were 1.3%.)
The MSCI Security Selection Index also did well in 2003, producing a return of 19%. That index, which contains long/short equity, market neutral equity and short-biased equity, returned 1.9% in December.