Hedge Funds Clear Winners; Preliminary Estimate Shows U.S. Hedge Fund Gained 10.6% Net in 2000

Business Wire, Jan 9, 2001

Business Editors

NASHVILLE, Tenn.--(BUSINESS WIRE)--Jan. 9, 2001

Preliminary estimates show the Average U.S. Hedge Fund finished the year strongly, gaining 1.6% net in December, compared with a -4.9% drop for the NASDAQ and gains of 0.5% and 3.7% for the S&P 500 and the Dow, respectively, reported Steven A. Lonsdorf, CEO of Van Hedge Fund Advisors International, Inc., a global hedge fund advisory firm. For the year to date, preliminary estimates show the Average U.S. Hedge Fund outperformed all of the major indices with a 10.6% net return. In comparison, 2000 was the first time all three major indices incurred losses since 1990 with the Dow dropping -4.7%, the S&P 500 falling -9.1% and the NASDAQ plummeting -39.2%.

"Although some of the indices did make up ground in December, it was not enough to overcome the steady losses incurred over the course of the year," said Lonsdorf. "In fact, the S&P 500 lost money eight out of twelve months in 2000. Hedge funds, however, were able to stem losses and appear to have outperformed the S&P 500 nine out of the past twelve months.

"The markets rallied briefly on Wednesday when the Fed cut interest rates by 50 basis points, but quickly retrenched as fears about corporate profits again took center stage. The Average U.S. Hedge Fund not only provided strong capital preservation in 2000, but also generated premiums over the major indices ranging from 15.3 percentage points to 49.8 percentage points. Investors who are concerned about what direction the markets will take in 2001 would be wise to consider allocations to carefully selected hedge funds," Lonsdorf concluded.

Final December performance for U.S., Offshore and Global hedge funds, by strategy, will be released later this month.

A registered investment advisor, Nashville, Tenn.-based Van Hedge Fund Advisors International, Inc. introduces top-performing hedge funds to substantial investors in the U.S. and abroad.

The Company's information on hedge funds is based on information received (and not audited or independently verified) from the hedge funds in its databases and may not be representative of all hedge funds. Hedge fund returns are net of fees and performance allocations. The timing of the deduction of such fees and performance allocations may affect the reported performance. Different statistics may be based on different numbers of funds. Averages are not dollar-weighted. Past results are not necessarily indicative of future performance.