The Financial Standard – While global hedge funds continue to outperform global equities, the big news is that they are doing it for only one-third the risk.
The latest GreenwichVan Hedge Fund Index report for January 2006 shows that the S&P 500 scored a return, in local currency terms, of 10.3 per cent for the 12 month period, even though the corresponding return from global hedge funds was 12.2 per cent.
But it’s the risk story behind global hedge funds that is emerging as the real driver behind the sector as it gains acceptance as a mainstream asset class by more traditional investors, particularly with alternative strategies tipped to reach 20 per cent over the next few years.
Reinforcing the risk perspective, over the all important five year period global hedge funds outperformed global equities by a factor of 20, but they did it for only one-third the risk quotient.
On the back of this stability of risk in the global hedge fund sector, Van MacDonald Global Partners, local partner of the GreenwichVan group in Australia, is introducing the ‘AAA’ Rabobank Structured Hedge Fund Note to Australian investors that will be underpinned by the global hedge fund index that they monitor.
