Investing August 25, 2003

MSCI Hedge Fund Index Cools a Bit in July

August 25, 2003 (PLANSPONSOR.com) - The MSCI Hedge Fund Composite Index dipped a bit during the hot days of July by posting a 0.28% July return, down a tick from the 0.50% return the month before.
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The MSCI World Equity Index was up 1.92% in July.  For the year up to July 31, the Composite index is up 8.25% ahead of its 7.95% year to date showing at the end of June (See  MSCI Hedge Fund Index Wrings Out Gain In June ). The World Equity Index had a 12.06% showing for the year as of July, according to a MSCI news release.

Compared to the World Sovereign Debt Index, which returned a negative 2.97% in July, the Composite index was better for the month.  For the year, the World Sovereign Debt Index has stayed on the positive side, up 4.01%.

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July’s largest process group gainer was Security Selection Index, those managers who combine long positions and short sales with the aim of benefiting from their ability in selecting investments while offsetting systematic market risks. The Security Selection Index turned in a 1.41% July performance.

Next in line was Specialist Credit, which gained 0.90%.  Specialist Credit funds are those that seek to lend to credit-sensitive issuers. Likewise, gains were seen in the Multi-Process Group.   Multi-Process Group funds, strategies that focus on spread relationships between pricing components of financial assets or commodities, ended the month 0.65% higher.

Meanwhile, heading the July losers list were Directional Trading (-1.58%) and Relative Value (-0.53%).

Two of the three asset class indices were in the plus column in July with the Equity Index leading the charge at 0.90% and Fixed Income trailing far behind at 0.10%. The Diversified Index turned in a negative 0.63% performance for the month.

The MSCI Hedge Fund Indices are composed of more than 160 indices. More than 1,700 hedge funds have agreed to participate in the database and there are over 1,550 hedge funds currently in the MSCI Hedge Fund Indices and Database.

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