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H
EDGE
 
F
UND
 
A
DVISORY
 
FOR IMMEDIATE RELEASE
 
For further information contact:
Hennessee Group LLC212-857-4400www.hennesseegroup.com
 
HEDGE FUND “DECEMBER EFFECT”
Positive December for Equities and Hedge Funds Predicted
November 30, 2009 – New York, NY – Hennessee Group LLC, an adviser to hedge fund investors, believesthe equity markets are likely to continue their momentum heading into the end of the year and lead toadditional gains for investors during the month of December. Charles Gradante, Co-Founder of theHennessee Group, stated
“We believe the ‘December Effect’, whereby investors choose to defer payingtaxes on equity market gains until the following year, will provide additional support to the equitymarkets as we close out the year. And historical data seems to support this thesis as the equitymarkets have experienced gains during the final month of the year 70% of the time when positivethrough the month of November.”
Gradante added,
“In addition, hedge funds have experienced gainsin December 100% of the time during these same calendar year periods.”“DECEMBER EFFECT”: EQUITY MARKETS AND HEDGE FUNDS
Hennessee Group recently conducted a brief study examining the historical performance of the equitymarkets and hedge funds when entering the final month of the year with positive year-to-date gains.Hennessee Group focused on the calendar year periods dating back to 1995; using the S&P 500 Index andthe Hennessee Hedge Fund Index as proxies. As illustrated in the chart below,
dating back to 1995, theS&P 500 Index has generated positive returns through November in ten calendar year periods andexperienced additional gains in December 70% of the time
. In comparison,
hedge funds managed togenerate gains in nine of the calendar year periods the S&P 500 Index was positive through Novemberand experienced gains in December 100% of the time.
 
Gradante stated, “
The data supports the ‘
 December Effect Theory
’ and bodes well for investors as weclose out 2009.
 
Hennessee Research indicates that when the equity markets were positive throughNovember, they gained on average +2.1% in December while hedge funds gained +1.9%.”
YearS&P 500 IndexHennessee Hedge Fund IndexS&P 500 IndexHennessee Hedge Fund Index
1995 31.82% 15.79% 1.74% 1.65%1996 22.91% 17.67%-2.15%1.20%1997 28.98% 16.84% 1.57% 1.16%1998* 19.91%-0.28%5.64% 1.70%1999 12.97% 22.57% 5.78% 6.70%2003 20.28% 16.75% 5.08% 1.76%2004 5.57% 6.31% 3.25% 1.82%2005 3.12% 6.10%-0.10%1.66%2006 12.23% 9.99% 1.26% 1.28%2007 4.44% 10.85%-0.86%0.33%
Positive109710December PerformanceYTD Performance Through November
 
Note: Hedge funds experienced a challenging period in 1998 due in large part to the failure of 
Long-Term Capital Management
.
OPTIMISTIC HEDGE FUND OUTLOOK FOR 2010
 While the Hennessee Group is optimistic for both the equity markets and hedge funds heading into the finalmonth of the year due to the “December Effect”, we are more optimistic that hedge funds are well positionedfor a good year on a relative basis in 2010.
The Hennessee Group believes fundamentals will matteragain in the coming year which should lead to an increase in dispersion between sectors and individualstocks, particularly as the rally gets long in the tooth.
In addition, the equity markets are likely to trade ina range as opposed to trend in one particular direction in 2010.
The Hennessee Group believes such anenvironment should favor hedge funds relative to their traditional counterparts as they will have theopportunity to generate alpha on the both the long and short side of their portfolios while not havingto rely on market direction or beta for returns.
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