Cogent Dynamic Averages of Hedge Fund Investment Strategies Post Strong Gains in July: up 1.79%

With over 2450 alternative investments reporting results for the month of July 2005, the average hedge fund has advanced +1.796% for the month. Following on the heels of a +1.468% gain in June, alternative investments are ahead by +3.215% for the year to date.

Fairfield CT (PRWEB) August 17, 2005 -- Cogent Investment Research LLC, the operator of the free CogentHedge online alternative investment information and analysis resource for investment professionals worldwide (www.cogenthedge.com), reports that as of the tenth business day of August 2005, and with over 2450 entities now reporting results for the month, the Cogent Dynamic Averages are as follows:

Commentary:

Current Hedge Fund Performance: The Tortoise or the Hare?

A principal trait of alternative investments is their ability to capture gains in all market cycles. Hedge funds should be able to maintain consistent - but not necessarily large - positive growth month after month. However, different investment strategies excel at different objectives: a strategy that may generate outsized short-term gains in a particular month are less stellar over the long-term. For instance, Emerging Markets Equities, as the second best performing investment strategy in July, returned 3.813% for the month. Consistency? Time Window Analysis, and specifically the '% Profitable Periods' statistic for this strategy shows that it doesn't consistently post positive returns until the rolling two-year time frame; a long-term approach is obviously required for this strategy even though the average two-year gain is nearly 60%. On the other hand, emerging markets debt strategies gained only 1.220% for July but are consistently positive at the rolling six-month period - and show an average two-year gain of 32%.

At what point do various investment strategies hit 100% positive gains?

% Positive Gains by Rolling Time Period

=======================================

July Net % Gain

===============

All Funds

1.796%

Emerging Markets Equity

3.813%

Emerging Markets Debt

1.220%

Pairs Trading

4.580%

Index Arbitrage

3.388%

Industry/Sector Specialist L/S

3.374%

Single-Mgr x/Futures Mgrs

2.119%

Diversified Funds of Funds

1.663%

Fixed Income Arbitrage

1.435%

Managed Futures

0.316%

Options/Derivatives Arbitrage

-0.348%

% Positive Gain by Rolling 3-Month Period

=========================================

All Funds

81.538%

Emerging Markets Equity

75.385%

Emerging Markets Debt

95.385%

Pairs Trading

87.692%

Index Arbitrage

63.077%

Industry/Sector Specialist L/S

76.923%

Single-Mgr x/Futures Mgrs

81.538%

Diversified Funds of Funds

80.000%

Fixed Income Arbitrage

95.385%

Managed Futures

66.154%

Options/Derivatives Arbitrage

84.615%

% Positive Gain by Rolling 6-Month Period

=========================================

All Funds

93.548%%

Emerging Markets Equity

77.419%

Emerging Markets Debt

100.000%

Pairs Trading

87.097%

Index Arbitrage

66.129%

Industry/Sector Specialist L/S

83.871%

Single-Mgr x/Futures Mgrs

91.935%

Diversified Funds of Funds

91.935%

Fixed Income Arbitrage

100.000%

Managed Futures

77.419%

Options/Derivatives Arbitrage

96.774%

% Positive Gain by Rolling 12-Month Period

=========================================

All Funds

100.000%

Emerging Markets Equity

92.857%

Emerging Markets Debt

100.000%

Pairs Trading

100.000%

Index Arbitrage

62.500%

Industry/Sector Specialist L/S

85.714%

Single-Mgr x/Futures Mgrs

100.000%

Diversified Funds of Funds

100.000%

Fixed Income Arbitrage

100.000%

Managed Futures

92.857%

Options/Derivatives Arbitrage

100.000%

% Positive Gain by Rolling 18-Month Period

=========================================

All Funds

100.000%

Emerging Markets Equity

98.000%

Emerging Markets Debt

100.000%

Pairs Trading

100.000%

Index Arbitrage

72.000%

Industry/Sector Specialist L/S

96.000%

Single-Mgr x/Futures Mgrs

100.000%

Diversified Funds of Funds

100.000%

Fixed Income Arbitrage

100.000%

Managed Futures

98.000%

Options/Derivatives Arbitrage

100.000%

% Positive Gain by Rolling 24-Month Period

=========================================

All Funds

100.000%

Emerging Markets Equity

100.000%

Emerging Markets Debt

100.000%

Pairs Trading

100.000%

Index Arbitrage

77.273%

Industry/Sector Specialist L/S

100.000%

Single-Mgr x/Futures Mgrs

100.000%

Diversified Funds of Funds

100.000%

Fixed Income Arbitrage

100.000%

Managed Futures

100.000%

Options/Derivatives Arbitrage

100.000%

Alternative investments overall are showing healthy performance gains. Only four investment strategies are still in negative territory for the year to date: Convertible Arbitrage (-4.820%), Credit Spread Arbitrage (-3.288%), Managed Futures (-1.689%) and Options Strategies (-0.942%). All other investment strategies tracked by CogentHedge reported monthly results in the positive range. The top six strategies for the month are as follows:

July 2005

% Gain

=========

All Funds

1.796%

Pairs Trading

4.580%

Emerging Markets Equity

3.813%

Index Arbitrage

3.388%

Industry/Sector Specialist L/S

3.374%

Value Strategies

3.129%

Growth Strategies

3.128%

YTD 2005

% Return

========

All Funds

3.215%

Pairs Trading

7.508%

Emerging Markets Equity

12.598%

Index Arbitrage

6.499%

Industry/Sector Specialist L/S

4.899%

Value Strategies

5.339%

Growth Strategies

5.248%

Current data can be found at http://www.cogenthedge.com/home/inv_strategy.asp.

For more information, come to www.cogenthedge.com.

David Slavin

Managing Director

Cogent Investment Research LLC

+1 609 945-0629

www.cogenthedge.com

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