With a performance of 5.02%, hedge fund index ARIX (Absolute Return Investable Index) Composite index - which covers the four hedge fund strategies of equity hedge, event driven, relative value and tactical trading and is sponsored by German Feri Institutional Advisors - outperformed its rival investable hedge fund indices in the year to June 2008.
The ARIX Top Return Index, which as a sub-index of the ARIX Composite, only covers those hedge funds with the highest return targets, achieved a 24.26% increase, according to data by independent advisory institute Absolut Research. Both indices also outperformed their rivals over the past three years.
“Hedge fund indices will increasingly gain importance in the face of EU-wide investment guidelines,” commented Bernd Kreuter, (pictured right) partner and head of alternatives at Feri.
” Since the revision of the UCITS guidelines in 2007, high-quality investable hedge fund indices are UCITS III compliant. Thus, it is possible to use derivatives on hedge fund indices within investment funds with a European passport - so-called UCITS III funds.
“Moreover, such indices can be used as benchmarks for funds of hedge funds or traditional absolute return strategies.”
“In order to be included in the ARIX, a hedge fund has to fulfil a number of exactly defined quantitative and qualitative factors,” Kreuter adds.