Cogent Dynamic Averages of Hedge Fund Investment Strategies Post Strong Gains in July up 179



Cogent Investment Research LLC, the operator of the free CogentHedge online alternative investment information and analysis resource for investment professionals worldwide (www.cogenthedge.com), reports that as of the tenth business day of August 2005, and with over 2450 entities now reporting results for the month, the Cogent Dynamic Averages are as follows:

Commentary:
Current Hedge Fund Performance: The Tortoise or the Hare

A principal trait of alternative investments is their ability to capture gains in all market cycles. Hedge funds should be able to maintain consistent - but not necessarily large - positive growth month after month. However, different investment strategies excel at different objectives: a strategy that may generate outsized short-term gains in a particular month are less stellar over the long-term. For instance, Emerging Markets Equities, as the second best performing investment strategy in July, returned 3.813% for the month. Consistency Time Window Analysis, and specifically the '% Profitable Periods' statistic for this strategy shows that it doesn't consistently post positive returns until the rolling two-year time frame; a long-term approach is obviously required for this strategy even though the average two-year gain is nearly 60%. On the other hand, emerging markets debt strategies gained only 1.220% for July but are consistently positive at the rolling six-month period - and show an average two-year gain of 32%.

At what point do various investment strategies hit 100% positive gains

% Positive Gains by Rolling Time Period
=======================================
July Net % Gain
===============
All Funds
1.796%

Emerging Markets Equity
3.813%
Emerging Markets Debt
1.220%

Pairs Trading
4.580%
Index Arbitrage
3.388%
Industry/Sector Specialist L/S
3.374%
Single-Mgr x/Futures Mgrs
2.119%
Diversified Funds of Funds
1.663%
Fixed Income Arbitrage
1.435%
Managed Futures
0.316%
Options/Derivatives Arbitrage
-0.348%

% Positive Gain by Rolling 3-Month Period
=========================================
All Funds
81.538%

Emerging Markets Equity
75.385%
Emerging Markets Debt
95.385%

Pairs Trading
87.692%
Index Arbitrage
63.077%
Industry/Sector Specialist L/S
76.923%
Single-Mgr x/Futures Mgrs
81.538%
Diversified Funds of Funds
80.000%
Fixed Income Arbitrage
95.385%
Managed Futures
66.154%
Options/Derivatives Arbitrage
84.615%

% Positive Gain by Rolling 6-Month Period
=========================================
All Funds
93.548%%

Emerging Markets Equity
77.419%
Emerging Markets Debt
100.000%

Pairs Trading
87.097%
Index Arbitrage
66.129%
Industry/Sector Specialist L/S
83.871%
Single-Mgr x/Futures Mgrs
91.935%
Diversified Funds of Funds
91.935%
Fixed Income Arbitrage
100.000%
Managed Futures
77.419%
Options/Derivatives Arbitrage
96.774%

% Positive Gain by Rolling 12-Month Period
=========================================

All Funds
100.000%

Emerging Markets Equity
92.857%
Emerging Markets Debt
100.000%

Pairs Trading
100.000%
Index Arbitrage
62.500%
Industry/Sector Specialist L/S
85.714%
Single-Mgr x/Futures Mgrs
100.000%
Diversified Funds of Funds
100.000%
Fixed Income Arbitrage
100.000%
Managed Futures
92.857%
Options/Derivatives Arbitrage
100.000%


% Positive Gain by Rolling 18-Month Period
=========================================

All Funds
100.000%

Emerging Markets Equity
98.000%
Emerging Markets Debt
100.000%

Pairs Trading
100.000%
Index Arbitrage
72.000%
Industry/Sector Specialist L/S
96.000%
Single-Mgr x/Futures Mgrs
100.000%
Diversified Funds of Funds
100.000%
Fixed Income Arbitrage
100.000%
Managed Futures
98.000%
Options/Derivatives Arbitrage
100.000%

% Positive Gain by Rolling 24-Month Period
=========================================
All Funds
100.000%

Emerging Markets Equity
100.000%
Emerging Markets Debt
100.000%

Pairs Trading
100.000%
Index Arbitrage
77.273%
Industry/Sector Specialist L/S
100.000%
Single-Mgr x/Futures Mgrs
100.000%
Diversified Funds of Funds
100.000%
Fixed Income Arbitrage
100.000%
Managed Futures
100.000%
Options/Derivatives Arbitrage
100.000%

Alternative investments overall are showing healthy performance gains. Only four investment strategies are still in negative territory for the year to date: Convertible Arbitrage (-4.820%), Credit Spread Arbitrage (-3.288%), Managed Futures (-1.689%) and Options Strategies (-0.942%). All other investment strategies tracked by CogentHedge reported monthly results in the positive range. The top six strategies for the month are as follows:

July 2005
% Gain
=========
All Funds
1.796%

Pairs Trading
4.580%
Emerging Markets Equity
3.813%
Index Arbitrage
3.388%
Industry/Sector Specialist L/S
3.374%
Value Strategies
3.129%
Growth Strategies
3.128%

YTD 2005
% Return
========
All Funds
3.215%

Pairs Trading
7.508%
Emerging Markets Equity
12.598%
Index Arbitrage
6.499%
Industry/Sector Specialist L/S
4.899%
Value Strategies
5.339%
Growth Strategies
5.248%

Current data can be found at http://www.cogenthedge.com/home/inv_strategy.asp.

For more information, come to www.cogenthedge.com.

David Slavin
Managing Director
Cogent Investment Research LLC
+1 609 945-0629
www.cogenthedge.com





Cogent Dynamic Averages of Hedge Fund Investment Strategies Post Strong Gains in July up 179