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Hedge funds start strongly in 2006

A key index of hedge funds rose by 3.5 per cent last month, a new report claims.

Greenwich-Van Advisors has revealed that its Greenwich-Van Global Hedge Fund Index rose significantly in January this year.

The hedge fund database manager notes that the S&P 500 increased by 2.7 per cent over the month, the Morgan Stanley Capital International World Equity Index returned 4.4 per cent while the Lehman Brothers Aggregate Bond Index was flat during January.

Wade McKnight, vice president of Greenwich-Van, commented: "Strong global equity indices propelled most hedge funds higher during the first few weeks of 2006. Emerging market managers remain frontrunners, as was the case in 2005, returning 7.1 per cent.

"The second strongest hedge fund strategy in January, with a preliminary return of 5.3 per cent, was the Aggressive Growth long/short equity strategy group. This strategy could perform very well in 2006 if the so-called 'January Barometer' holds true. Short Selling managers, not surprisingly, generated the worst showing of -4.7 per cent."

The Greenwich-Van Global Hedge Fund Index represents the average performance, net of fees, of hedge fund managers reporting to Greenwich-Van and has reported gains over each of the last 17 calendar years.

Hedge funds are speculative funds managing investments for private investors, often rich individuals or institutions.