Hedge Funds Finish the Quater on a Strong Note

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Greenwich, CT, USA, October 14, 2005 The Van Global Hedge Fund Index (“VGHFI” or the “Index”) gained 1.7% in September while the Van Composite Investable Index (“VI2” or the “Investable Index”) increased by 1.50%, according to hedge fund index provider Van Money Manager Research, LLC (VAN).

“For the second consecutive month, all twenty of VAN’s individual hedge fund strategy and substrategy indices were positive, with Emerging Markets (+4.3%) the clear winner in September,” noted Kevin Campbell, Vice President of VAN. “This strategy has experienced a prolonged period of attractive returns, beginning in October 2002. Over the three-year period, the Van Global Emerging Markets Index increased by 90% and has experienced only six losing months. The second best performing strategy over this time period, Distressed Securities, increased by approximately 67%.”

Rising equity markets provided an attractive environment for Long/Short Equity funds, which gained 1.9% on average. Funds with an Opportunistic investment style gained the most, 2.8% on average. Even those managers with a dedicated short bias profited during the month (+0.4%) despite increasing equity prices. Higher energy prices and rising interest rates and the volatility stemming from hurricanes in the Gulf Coast region provided attractive investment opportunities for managers with a directional bias.

Convertible Arbitrage remains the only strategy in the red for the year. Four consecutive positive months for the strategy, however, resulted in the loss for this index improving to -2.3% through September.

The Van Global Hedge Fund Index rose to a value of 13,154.65 in September. The Index had an initial value of 1,000 at January 1, 1988. Over its 17 year and 9 month history, the Index generated a net compound annualized return of 15.6%, compared to a 12.0% compound annualized return for the S&P 500.

Van Composite Investable Index
The Van Composite Investable Index posted a strong return of 1.50% in September and is up 4.41% for the year. The Investable Index has achieved an annualized return of 11.85% versus an annualized return of 11.7% for the VGHFI since its inception. Its correlation of 0.96 to the Van Global Hedge Fund Index demonstrates the Investable Index’s ability to represent the broader hedge fund universe.

Comparative Benchmarks
For comparison purposes, the S&P 500 gained 0.8%, the Morgan Stanley Capital International World Equity Index (“MSCI WEI”) gained 2.5%, the Nikkei 225 gained 9.4% and the Dow Jones Europe Stoxx Index gained 2.1%. The Lehman Brothers Aggregate Bond Index (“LBABI”) lost – 1.0%.

As currently calculated, September 2005 returns for the Van Global Hedge Fund Indices and the Investable Index are shown below. Past performance of the Van Global Hedge Fund Index and the Van Composite Investable Index may be viewed at our sister company’s website at www.vanhedge.com.

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