FOR IMMEDIATE RELEASE
Hedge Funds Gain 12.35% in 2006, Emerging Markets Up 22.02%
FAIRFIELD, Iowa, January 10, 2007 – The Barclay Hedge Fund Index gained 1.56% in December and is up 12.35% for the year, according to flash estimates from The Barclay Group.
“December was a month where everything went right,” says Sol Waksman, founder and president of The Barclay Group.
“All of the MSCI Developed Market Indices and all but five of the Emerging Markets Standard Indices measured gains for the month. Somehow, even the short-sellers found a way to profit in this global equity rally.”
“Looking back from here, 2006 was quite a good year. But keep in mind that almost half of the year’s return came in the last quarter. It wasn’t all that rosy at mid-year.”
All 18 of Barclay’s hedge fund indices had positive returns in December. Barclay’s Emerging Markets Index jumped 3.57%, its sixth straight month of gains. Emerging Markets was up 22.02% in 2006, and has averaged a 20% annual return over the past five years.
“Emerging markets had a phenomenal year in 2006,” says Waksman. “The MSCI BRIC Index increased by 47.69%, as China soared 78.67%, Russia gained 52.11%, and India added 46.47%. Brazil was the laggard with a gain of 28.46% for the year.”
Other strong hedge fund sector gains for 2006 include Barclay’s Healthcare and Biotechnology Index, 15.18%; Event Driven, 15.22%; Equity Long Bias, 14.70%; Distressed Securities, 14.65%; and Multi Strategy, 14.28%.
“Given the healthy returns in most hedge fund sectors, it’s not surprising that funds of funds had their best year since 2003, gaining 9.28%, or roughly twice the risk-free rate of return,” says Waksman.
Only one hedge fund sector lost money in 2006. Equity Short Bias was down 5.24%.
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The Barclay Group, founded in 1985, actively tracks more than 6,000 hedge funds and managed futures programs. Barclay has created and regularly updates 18 proprietary hedge fund indexes and eight managed futures indexes.
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