Consultant and advisory firm Hennessee Group LLC, which calculates the Hennessee Hedge Fund Indices using performance data reported from over 1,000 hedge funds, has released its latest data for January 2010. The Hennessee Hedge Fund Index, an “equally weighted average of the funds in the Hennessee Hedge Fund Indices,” declined -0.50%. After comparing the Hennessee Index with other indices, including the S&P 500 (-3.70%), the Dow Jones (-3.46%), and the NASDAQ (-5.37%), Hennessee Co-Founder Charles Gradante commented on the hedge fund index´s relatively positive performance in comparison: “January was a challenging month as the equity rally was short lived and reversed course mid-month,” Mr. Gradante said in the press release. Nevertheless, Managing Principal Lee Hennessee concluded that “hedge funds outperformed broad equity benchmarks in January on a relative basis.”
The Hennessee Long/Short Equity Index dropped -0.86% last month as “stocks retraced in January as China moved to tighten lending, and investors grew concerned about global growth.” According to the press release, the potential increased bank regulations proposed by the Obama administration remained uncertain and also impacted equity indices. Washington politics particularly affected health care stocks, the only sector with gains in January, as they were “buoyed by strong gains in biotech as well as by the special Senate election in Massachusetts.”Mr. Gradante commented on Washington’s influence in the press release, revealing that “many managers are stating that one of the key sources of volatility and unpredictability is the potential for political risks from Washington.” Hennessee’s Global/Macro Index showed a similar decline for January (-0.97%) as “managers remain concerned about issues in Europe as Portugal, Italy, Greece and Spain threaten to undermine the Eurozone.”
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