The Van Global Hedge Fund Index, a widely used industry benchmark measuring average hedge fund performance, gained 0.7% net of fees in January. Van Hedge Fund Advisors International, Inc. (VAN), a leading hedge fund advisory firm, reports that the figure is based on over 700 January returns. The Index?s January return was the same whether including or excluding the performance of funds of funds. The Van U.S. Hedge Fund Index and the Van Offshore Hedge Fund Index, which specifically focus on U.S.-domiciled and non-U.S.-domiciled hedge funds, respectively, posted January gains of 0.6% net and 0.7% net. The Global Index incorporates both types of funds.

The average hedge fund has made money the last four months in a row but the major stock market benchmarks were down in both December and January. The S&P 500 and the Dow Jones Industrial Average lost ?2.6% and ?3.3% last month, respectively, while the Average Equity Mutual Fund fell ?2.2%. Despite the fact that hedge funds invest heavily in equities, they have repeatedly beaten stocks in down markets, often by significant margins. A diversified portfolio of hedge funds has proven to be an important means of capital preservation for sophisticated investors over the past few years. VAN expect that interest in these vehicles will further grow in 2003 as investors continue to face a daunting market.

The most successful global hedge fund strategies for January were Distressed Securities, which averaged a 2.6% net gain, and Market Neutral ? Arbitrage, which averaged a 2.1% net gain. Market Timing and Value both lost money in January, with average net returns of ?0.7% and ?0.4%, respectively. Approximately 63% of the funds included in the Index reported a positive return for the month, with 93% beating the S&P 500.

The Van Global Hedge Fund Index climbed to a value of 9,108.75 in January. (The version of the Index which excludes funds of funds rose to a value of 9,770.61.) The Index began with a value of 1,000 in January 1988. Over its 15 year and one month history, the Index has generated a net compound annualized return of 15.8% (16.3% excluding fund of funds performance). Past performance of the Van Global Hedge Fund Index may be viewed at www.hedgefund.com.

Final January returns for the Van Hedge Fund Indices will be calculated at the end of February, after several hundred more funds have submitted their returns to VAN. Those results will supercede the returns reported herein, should they differ. Final January returns for the Van Hedge Fund Indices will be posted at www.hedgefund.com when they become available.