PR Newswire: news distribution, targeting and monitoring
2014
See more news releases in Banking & Financial Services

Morningstar Reports Hedge Fund Performance for September, Asset Flows Through August

Share with Twitter Share with LinkedIn

CHICAGO, Oct. 21 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today reported preliminary hedge fund performance for September 2010 and asset flows through August. September closed out a profitable quarter for hedge funds. The Morningstar 1000 Hedge Fund Index rose 5.2% in September and 7.6% over the third quarter, while the currency-hedged Morningstar MSCI Composite Index climbed 2.8% for the month and 4.3% for quarter.

"Hedge funds ended the third quarter with a bang," said Nadia Papagiannis, alternative investment strategist for Morningstar. "All strategies profited, as equities, bonds, commodities, and currencies rallied."

U.S. stocks, as measured by the S&P 500 Index, experienced their best September in 71 years, on the news of more potential easing by the Federal Reserve and better than expected economic data with payrolls and manufacturing. The Morningstar U.S. Equity Hedge Fund Index rose 6.0% in September against the S&P 500's 8.9% climb. European stocks, as measured by the MSCI Europe NR Index, increased 11.0%, as positive GDP and sentiment data outweighed credit concerns over Ireland and Portugal. The Morningstar Europe Equity Hedge Fund Index rose 7.8% during the month.

In mid September, the Federal Reserve's statements suggesting continued quantitative easing triggered a U.S. dollar freefall against several currencies and near-record lows in two- and five-year Treasury yields. This provided trading opportunities for funds in Morningstar's Debt Arbitrage and Global Non Trend Hedge Fund Indexes, which gained 3.6% and 4.0%, respectively in September, and 6.6% and 4.6% for the quarter. The U.S. dollar's plunge contributed to the rise in several commodities, including gold, silver, sugar, and cotton. Funds in Morningstar's Global Trend Hedge Fund Index, which profit from price trends in commodity futures and other derivatives, saw a 6.1% rise in September, their best month since early 2008.

Hedge fund of funds in the Morningstar's database also posted their best results since 2008. The Morningstar Hedge Fund of Funds Index outpaced the Morningstar Multi-Strategy Hedge fund index by almost a full percentage point in the third quarter of 2010, after having underperformed in the previous six quarters.

Merger and acquisition activity picked up in the third quarter of 2010, particularly in emerging markets and the energy sector. Funds in the Morningstar Corporate Action Hedge Fund Index, which engage in strategies such as merger arbitrage, rose 4.3%. Acquisition activity through leveraged buyouts helped to spur new corporate high-yield debt issuance, which almost broke 2009's year-long record this month. The appetite for high-yield bonds and risky assets in general boded well for funds in Morningstar's Distressed Securities Hedge Fund Index, which increased 2.6% in September. Volume in convertible bond issuance also improved in the third quarter, especially in Asia. The Morningstar Convertible Arbitrage Hedge Fund Index climbed 7.4% in the three months ending September 30.

In addition to a favorable market environment in September, hedge funds also appear to be back in favor with investors. After two months of net outflows, single-manager hedge funds in Morningstar's database saw $1.3 billion in inflows in August. Convertible arbitrage hedge funds attracted the most assets in August, $773 million. For the year to date through August, hedge funds in the database have leaked $4.4 billion, although funds in the Global Non-trend, U.S. Equity, and Corporate Actions categories experienced inflows of $3.3 billion, $1.4 billion, and $1.2 billion, respectively.  

September returns for the Morningstar Hedge Fund Indexes are based on funds that reported as of October 18, 2010. September returns for the Morningstar MSCI Hedge Fund Indexes and August asset flows are based on funds that reported as of October 13, 2010. Hedge fund investors, managers, consultants, and advisors can access additional information through the Morningstar® Alternative Investment Center(SM), formerly Morningstar® Altvest(SM), the company's research platform designed specifically for hedge funds, or Morningstar Direct(SM), the company's global research platform for institutions.

Morningstar has approximately 11,000 hedge funds and funds of hedge funds in its database. The Morningstar 1000 Hedge Fund Index, a global, broadly representative benchmark for hedge fund performance, has return history from January 2003. The index comprises the top 90% of eligible assets in Morningstar's hedge fund database. For the purposes of the index, Morningstar counts funds with shared portfolios as a single hedge fund; funds of hedge funds are excluded from consideration. The index is updated daily for the previous month-end, rebalanced monthly, and reconstituted semi-annually. In addition, Morningstar has 17 category indexes and four broad category indexes based on Morningstar's strategy-specific classification system for hedge funds. Morningstar's hedge fund indexes are not investable.

In addition to calculating the Morningstar Hedge Fund Indexes, Morningstar also calculates hedge fund indexes by applying the MSCI Hedge Fund Index Methodology and Hedge Fund Classification Standard to Morningstar's hedge fund database. These indexes demonstrate the performance of hedge funds to investors who have hedged their currency exposure back into U.S. dollars. The MSCI Hedge Fund Index Methodology classifies hedge funds by investment process, geography, and asset class.

This release is not intended to be an offer or solicitation for the sale of hedge funds. The information is not warranted to be accurate, complete, or timely. When considering hedge funds, investors should consider various risks, including the fact that some products engage in leveraging and other speculative investment practices that may increase the risk of investment loss, can be illiquid, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, often charge high fees, and in many cases the underlying investments are not transparent and are known only to the investment manager. The high degree of leverage that is often obtainable in trading can lead to large losses as well as gains. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

About Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 360,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 4 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. The company has operations in 21 countries.


Morningstar Hedge Fund Index Performance

Sept. 2010

Q3

YTD Through Sept.

Morningstar 1000 HF USD

5.17

7.57

5.11

Morningstar Hedge Fund of Funds

4.78

7.37

1.94





Morningstar Hedge Fund Category Indexes




Morningstar Convtbl Arbitrage HF USD

2.77

7.37

5.18

Morningstar Corporate Actions HF USD

4.25

6.27

10.50

Morningstar Debt Arbitrage HF USD

3.61

6.56

8.78

Morningstar Distressed Sec HF USD

2.57

4.67

17.51

Morningstar Dvlp Asia Equity HF USD

5.89

7.36

5.23

Morningstar EM Equity HF USD

6.83

11.23

6.41

Morningstar Equity Arbitrage HF USD

3.18

4.81

0.22

Morningstar Europe Equity HF USD

7.80

11.33

1.02

Morningstar Global Debt HF USD

1.40

4.25

6.22

Morningstar Global Equity HF USD

7.85

9.45

4.07

Morningstar Global Non Trend HF PUSD

3.99

4.55

2.80

Morningstar Global Trend HF USD

6.12

9.33

6.14

Morningstar Multi-Strategy HF USD

3.79

5.87

3.00

Morningstar Short Equity HF PUSD

5.08

7.27

2.85

Morningstar US Equity HF USD

5.97

6.21

5.41

Morningstar US Small Cap Eqty HF USD

6.34

6.31

2.55





Morningstar Hedge Fund Indexes with MSCI




Morningstar MSCI Composite AW

2.75

4.32

5.19

Morningstar MSCI Composite EW

3.65

5.24

5.02

Morningstar MSCI Composite Core Funds

3.23

4.85

4.87

Morningstar MSCI Composite Small Fund

3.94

5.44

4.92

Morningstar MSCI Developed Markets

3.45

4.52

4.65

Morningstar MSCI Directional Trading

3.31

5.03

4.18

Morningstar MSCI Emerging Markets

4.57

8.38

8.22

Morningstar MSCI Europe

2.97

3.66

4.03

Morningstar MSCI Global Markets

3.55

5.42

5.01

Morningstar MSCI Japan

0.86

-2.69

-3.77

Morningstar MSCI Multi-Process Group

3.65

5.14

5.71

Morningstar MSCI Merger Arbitrage

0.98

3.17

4.94

Morningstar MSCI North America

3.60

4.75

5.34

Morningstar MSCI Relative Value

1.72

3.86

5.71

Morningstar MSCI Security Selection

4.71

5.91

4.44

Morningstar MSCI Specialist Credit

1.61

3.92

8.84





Market Indexes




MSCI EM NR USD

11.11

18.03

10.75

MSCI Europe NR USD

10.99

19.35

-0.60

Russell 2000 TR USD

12.46

11.29

9.12

S&P 500 TR

8.92

11.29

3.89

BarCap Global Aggregate TR USD

2.35

7.30

6.96

DJ UBS Commodity TR USD

7.26

11.61

0.90

Est. Hedge Fund Flows By Morningstar Category

Aug. 2010 Flows


YTD Through Aug.

Convertible Arbitrage

772,686,279

315,860,984

Corporate Actions

(813,073,764)

1,196,854,578

Debt Arbitrage

183,927,906

(497,813,751)

Developed Asia Equity

(104,401,653)

(537,338,287)

Distressed Securities

(102,452,163)

(573,384,585)

Emerging Market Equity

153,127,233

(143,731,863)

Equity Arbitrage

(38,128,666)

(744,143,120)

Europe Equity

(76,954,088)

(975,115,139)

Global Debt

(48,200,086)

(1,478,133,171)

Global Equity

(67,289,198)

(1,341,533,546)

Global Non-Trend

581,686,116

3,275,441,555

Global Trend

287,507,399

(1,216,337,925)

Multi-strategy

207,364,040

(2,803,672,704)

Short Equity

(3,482)

12,885,536

U.S. Equity

432,457,439

1,373,689,355

U.S. Small Cap Equity

(98,909,734)

(239,110,456)

TOTAL SINGLE-STRATEGY HEDGE FUND FLOWS

1,269,343,578

(4,375,582,539)




Est. Flows by Morningstar Rating



1-star

(136,263,325)

(418,721,549)

2-star

9,967,022

(2,799,054,210)

3-star

475,469,100

(5,351,372,507)

4-star

238,133,845

1,652,205,102

5-star

517,931,257

1,216,246,122

No Rating

164,105,679

1,325,114,503

TOTAL SINGLE-STRATEGY HEDGE FUND FLOWS

1,269,343,578

(4,375,582,539)




©2010 Morningstar, Inc.  All rights reserved.

MORN-R

Media Contact:

Alexa Auerbach, 312-696-6481 or alexa.auerbach@morningstar.com



SOURCE Morningstar, Inc.



RELATED LINKS
http://www.morningstar.com

Featured Video

Journalists and Bloggers

Visit PR Newswire for Journalists for releases, photos, ProfNet experts, and customized feeds just for Media.

View and download archived video content distributed by MultiVu on The Digital Center.

Share with Twitter Share with LinkedIn
 

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

 
 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

 
 

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.

 

Online Member Center

Not a Member?
Click Here to Join
Login
Search News Releases
Advanced Search
Search
  1. PR Newswire Services
  2. Knowledge Center
  3. Browse News Releases
  4. Contact PR Newswire
  5. Send a News Release