The increases in the S&P 500 DRI (14.21%), Dow Jones Industrial Average (14.04%), and Nasdaq (10.26%) in the first 11 months of 2006 all outstripped the average return generated by hedge funds, according to research from Hennessee Group, a hedge fund advisory firm. The Hennessee Hedge Fund Index, which tracks over 1,000 hedge funds of various styles, increased just 10.06% in the 11-month period.
“Hedge funds have trailed equities on a relative basis in 2006 because of the unusually consistent strength in the equity markets,” said Charles Gradante, managing principal of Hennessee Group LLC. “There has only been one negative month for the S&P 500 in 2006. The last time there was only one negative month for the S&P500 was in 1995.