Hedge fund benchmark
A new asset-weighted benchmark for hedge funds has been introduced – the CSFB/Tremont Hedge Fund Index. The provider, Credit Suisse First Boston Tremont Index LLC, says it hopes the benchmark will help investors see hedge funds as a reliable investment option.
The new index will be updated monthly and will be available on the company’s web site (www.hedgeindex.com). It is designed to provide a standard for tracking and comparing hedge fund performance against other major asset classes on a global basis, and is the first such fund to be asset-weighted.
“An asset-weighted – as opposed to an equal-weighted – index provides a truer picture of how an investor’s dollar performs,” says Roland Lorenzo, president and COO of Credit Suisse First Boston Index Co.
The index comprises 284 funds, and the provider says many of the world’s largest hedge fund managers have agreed to provide performance data that meets strict reporting standards. To be included, a fund must have $10m under management and an audited financial statement.
It also has sub-indices tracking the nine major categories of investment styles and strategies used by hedge fund managers around the world – long/short equity, event-driven, equity market neutral, global macro, fixed-income arbitrage, dedicated short bias, managed futures, emerging markets and convertible arbitrage.