Fund of Hedge Funds Produced Respectable Returns in 2005

Stephen Harris

6 February 2006

Funds of hedge funds produced "respectable" cumulative returns for 2005, producing the sector’s second-highest annual performance return since 2000, according to the Alternative Asset Center Fund of Hedge Funds Benchmark. The benchmark produced returns of 7.53 per cent in 2005, outperforming the S&P 500 Index by 2.61 per cent and more than tripling the Lehman Bond Return of 2.43 per cent. The index returned 1.89 in 2001, 5.25 per cent in 2002 and 6.43 per cent in 2004. The index performed particularly well in the latter half of 2005, which augurs well for fund of hedge fund returns in 2006, according to AAC.