Credit Suisse/Tremont Hedge Fund Index shows that hedge funds held steady thanks to nimbleness in 2007
Hedge funds outperformed many major global equity indices for the year while maintaining considerably less volatility
New York, December 13, 2007 Credit Suisse Index Co., Inc., today released its latest industry research which details the performance of the Credit Suisse/Tremont Hedge Fund Index for 2007 year to date through November 30. The Index finished the period with estimated annual returns of 12.1%, according to Oliver Schupp, President of the Credit Suisse Tremont Index, LLC.
“We are pleased to present a research piece analyzing the performance of the Credit Suisse/Tremont Hedge Fund Index for 2007,” said Mr. Schupp. “Hedge funds experienced a challenging year due to certain market events but finished the year through November 30 by outperforming many major global equity indices while maintaining considerably less volatility.”
2007 was characterized by unusually high levels of volatility that impacted hedge fund strategies and financial markets throughout the year. The piece includes comments on the volatility trend, and the resultant nimbleness of hedge fund managers as they responded to the following specific factors which influenced financial markets in each of the four quarters of 2007:
China Factor: A major sell-off in China in late February sparked fears of an Asian crisis reminiscent of 1997. Despite the tumult, 9 out of 10 strategies proved profitable during the first quarter and, of particular note, the Emerging Markets sector has returned 19.0% YTD.
Sub-Prime Meltdown: Unexpected liquidation of several high profile hedge funds and apprehension of a contagion to other sectors that were exposed to sub-prime related securities in the early summer (June and July) caused market turmoil, but hedge funds proved nimble and posted strong returns during the second quarter;
Stat Arb Sell-Off: Selling pressure on hedge funds and bank proprietary trading desks to de-leverage and raise cash is widely believed to be the catalyst for the downward spiral in the equity markets during the first 2 weeks of August. Statistical arbitrage managers were caught in a significant level of technical sell-off in combination with abnormally high volatility and low liquidity, but 7 out of 10 strategies ended the third quarter in positive territory; and
Credit Crunch Returns: November’s equity sell-off in markets worldwide in anticipation of gradual deflation in the U.S. housing market, drop in consumer spending, and subsequent global economic slowdown caused November to be a difficult month for all investors. Hedge fund strategies performed well nonetheless, and the Broad Index returned 2.0% in the fourth quarter with all 10 sectors in positive territory through November 30th.
The Credit Suisse/Tremont family of hedge fund indices includes three separate indices:
1. The Hedge Fund Index (the “Broad Index”), an asset-weighted benchmark that measures hedge fund performance;
2. The Blue Chip Investable Index (“INVX”), an investable index comprised of 60 funds across the ten style-based sectors in the broad index that are open to investment; and
3. The Sector Invest Indices (“SECT”), which provide investment access to any of the ten style-based sectors in the broad index on an individual basis.
Credit Suisse Index Co., Inc., industry commentaries and publications are available on the Research and News section of our website, www.hedgeindex.com
The funds in the Credit Suisse/Tremont Investable Index or the Credit Suisse/Tremont Sector Invest Indices are selected from the funds included in the Credit Suisse/Tremont Hedge Fund Index. The Credit Suisse/Tremont Investable Hedge Fund Index and the Credit Suisse/Tremont Sector Invest Index comprise the largest funds that are open to investment and meet certain liquidity conditions in each of the 10 style-based sectors. The fund selection rules can be found on www.hedgeindex.com and include the following criteria:
- Funds are selected from the Credit Suisse/Tremont Hedge Fund Index by an asset-based formula
- The funds generally represent the largest eligible "open" funds in each of the ten sectors
- The funds are determined by application of the construction rules
- Member funds must provide timely performance reporting, audited financials and offering memorandum review for inclusion
Additional features of the Credit Suisse/Tremont Index series include:
- Transparency via www.hedgeindex.com and pages on Bloomberg and Reuters, Wall Street Journal Asia and Europe.
- A broad suite of index-linked investment products through Credit Suisse
Certain statements in this Press Release constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the companies to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. The Companies assume no obligation to update these forward looking statements to reflect actual results, changes in assumption or changes in other factors affecting such forward looking statements.
As one of the world's leading banks, Credit Suisse provides its clients with investment banking, private banking and asset management services worldwide. Credit Suisse offers advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as retail clients in Switzerland. Credit Suisse is active in over 50 countries and employs approximately 45,000 people. Credit Suisse's parent company, Credit Suisse Group, is a leading global financial services company headquarterd in Zurich. Credit Suisse Group's registered shares (CSGN) are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com. In its asset management business, Credit Suisse offers products across the full spectrum of investment classes, ranging from equities, fixed income and multiple-asset class products, to alternative investments such as real estate, hedge funds, private equity and volatility management. Credit Suisse’s asset management business manages portfolios, mutual funds, and other investment vehicles for a broad spectrum of clients ranging from governments, institutions and corporations to private individuals. With offices focused on asset management in 18 countries, Credit Suisse's asset management business is operated as a globally integrated network to deliver the bank's best investment ideas and capabilities to clients around the world. The asset management business of Credit Suisse is comprised of a number of legal entities around the world that are subject to distinct regulatory requirements; certain asset management products and services may not be available in all jurisdictions or to all client types.
Nadya Prashad, Credit Suisse, telephone 212 538 0859, firstname.lastname@example.org
Meg Bode, Bode Associates, telephone 516 869 6610, email@example.com
Suzanne Fleming, Credit Suisse, telephone 212 325 7396, firstname.lastname@example.org