November 2009 Morningstar® Hedge Fund Database Update

The Morningstar 1000 Hedge Fund Index posted its fifth consecutive month in the black with a 1.76% return in
November. This gain was due largely to an uptick in the equity markets – the S&P 500 Index rose 5.15% in November
after a 3.53% loss in October – though lagging returns in debt strategies did dampen hedge fund results. With a
19.34% gain through the first 11 months of 2009, the Morningstar 1000 is on pace to match or exceed its largest gain
since its inception (20.25% return in 2003). The S&P 500 is up 37.17% on the year. To track the performance of the
Morningstar 1000 against the S&P 500 in 2009, please see the chart below.

Equity strategies returned to form with another strong month, as emerging market equity (3.76%), U.S. small cap
equity (3.71%), U.S. Equity (2.81%) and global equity (2.42%) finished near the top of the strategy categories. Only
global trend (5.60%), buoyed by gains in the commodities markets, finished higher than these equity categories.
European and Asian markets were not as strong this month, as evidenced by the smaller gains of the Europe equity
(0.78%) and Developed Asia equity (0.20%) strategies. Still, all strategy categories save for short equity, which lost
1.43%, remained in the black for November. Likewise, all categories except for short equity are on track to gain
ground overall in 2009. We’ll examine yearly 2009 returns in detail when December data is available next month.

Looking at multi-manager strategies, fund of funds – derivatives outpaced the others with a gain of 2.38% while fund
of funds – equity (1.64%) and fund of funds – event (1.29%) followed behind. Fund of funds – debt (1.27%), fund of
funds – multistrategy (1.19%) and fund of funds – nondirectional (0.19%) finished out the list. Though funds of funds
have maintained mostly positive performance throughout 2009, their performance is lagging behind the industry as a
whole. We’ll look at this more in depth next month when complete yearly returns are available.

The top funds list for this month is dominated by global trend strategies. Special recognition is well deserved by The
Barbashop, LLC, a commodity trading advisor based out of Greenwich, Connecticut. Their namesake Barbashop
Program gained 88.07% in November while their Institutional Program gained a whopping 104.49% to bump its 2009
return up to 61.37%. Meanwhile, the Regent Fund, managed by 36 South Investment Managers gained 39.99% on
the month, and Superfund Asset Management had two global trend vehicles (Green Gold SPC and Gold SICAV) gain
over 35%.

The Morningstar Hedge Fund Database features nearly 14,000 investments, including approximately 8,200 active
funds and 5,700 dead funds for research purposes. Up to 300 data points, including information on investment
strategy, portfolio holdings, and hedging techniques, are used to sort each fund into a strategy category for peer group
analysis purposes. One hundred and thirty-four funds were added to the hedge fund database in November and 195
funds were obsoleted. Funds are removed from Morningstar’s database if the fund liquidates, if the manager wishes to
stop reporting returns, or if the fund fails to report for six months.

Morningstar Hedge Fund 1000 Index vs. the S&P 500 Index in 2009

Month Morningstar 1000 S&P 500 Month Morningstar 1000 S&P 500

January (1.01%) (7.98%) July 2.56% 9.20%

February (1.20%) (11.54%) August 1.60% 5.37%
March 1.95% 10.26% September 2.93% 5.19%
April 3.16% 18.56% October 0.22% (3.53%)
May 6.11% 6.15% November 1.76% 5.15%
June (0.04%) (1.10%) Year-to-Date 19.34% 37.17%
©2009 Morningstar, Inc., All rights reserved.