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MSCI Hedge Funds Down a Bit in January

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NEW YORK (–Reporting funds in the MSCI Hedge Fund Composite Index posted a loss of 0.4% in January. The figure is based on results reported by about 60% of the funds in the index.

The index had shown a positive 1.3% performance for December 2004 and was up 6.6% for the year at the end of December.

Of the index’s five subcategory tracks, three were up slightly for January, one was down and one was flat.

Dragging the overall index into negative territory was the Directional Trading category, down 2.6% for the month. MSCI defines directional trading strategies as those based on speculation on the market prices of currencies, commodities, equities and bonds in the futures and cash markets.

Among the three positive performers, the Specialist Credit notched the best result, albeit just 0.4%. That category comprises funds that lend to credit-sensitive issuers.

The Relative Value Index showed a 0.2% return, while the Security Selection Index eked out 0.1%. Security-selection managers in the MSCI index are those that use long and short positions.

The MSCI hedge funds outdid both MSCI’s World Equity Index and its World Sovereign Debt Index, which posted losses of 2.3% and 1.9%, respectively.

Contact Bob Keane with questions or comments at: [email protected].