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Hedge Funds End 2005 on Upbeat Note

FAIRFIELD, Iowa, January 9, 2006 – Hedge funds gained 2.37 percent in December and 10.88 percent in 2005, according to data released today by The Barclay Group.

“As a group, directional hedge funds did well in December and had an excellent 2005,” says Sol Waksman, founder and president of The Barclay Group.

For December, Barclay’s Pacific Rim Equities Index gained 5.40 percent and Barclay’s Emerging Markets Index was up 3.18 percent.

For 2005, Emerging Markets led Barclay’s 18 hedge fund indices with an annual gain of 21.35 percent, closely followed by Pacific Rim Equities at 20.36 percent.

“Equity markets outside the U.S had a good year in 2005,” says Waksman. “Given all the bad press focused on relatively low returns for fund of funds investors, it wouldn’t be surprising if portfolio managers took on a bit more risk in the coming year in order to increase returns.”

“Historically, diversified Fund of Funds managers have tended to be risk averse. Their portfolios have been over-weighted in arbitrage strategies and under-weighted in directional strategies. We may well see some rebalancing in 2006.”

Only one of Barclay’s 18 hedge fund indices lost money in 2005. The Convertible Arbitrage Index was down 3.83 percent for the year.

Click here to view eight years of Barclay/GHS Hedge Fund Index data.

The Barclay Group, founded in 1985, actively tracks more than 5,100 hedge funds and managed futures programs.

Barclay has created and regularly updates 18 proprietary hedge fund indices and eight managed futures indices.

Institutional investors, brokerage firms and private banks worldwide utilize Barclay’s indices as performance benchmarks for the hedge fund and managed futures industries.

Sol Waksman is an experienced media source, providing perspectives on hedge fund and managed futures trends.

For more commentary, call Sol Waksman at 641-472-3456 or email