Hedge Fund Research launches investable index
GLOBAL – Chicago-based Hedge Fund Research is to offer a set of investable hedge fund indices to institutional and retail investors from March 31.
The firm says the HFRX indices will be provided via Dresdner Kleinwort Wasserstein, Bear Stearns, Lehman Brothers and Barclays Capital.
Founded in 1993, HFR provides hedge fund performance information.
“HFRX consists of eight primary hedge fund strategy indices and an asset-weighted global index each providing a statistically pure proxy to the universe of hedge funds,” HFR said in a statement.
The indices are designed to offer transparency, daily re-pricing, consistent fund selection, “stringent” risk management and strict reporting standards.
"HFRX brings the benefits of indexation to the hedge fund space," said HFR chief executive Joseph Nicholas. He said that around one third of all institutionally managed assets are indexed “so it stands to reason that the advantages of indexation should extend into the hedge fund arena”.
The eight single strategies reflect the differing strategies that dominate the hedged fund asset class, HFR says. They are: convertible arbitrage, distressed securities, event-driven, equity hedge, equity market-neutral, macro, relative value and merger arbitrage.
Jean-Marc Spitalier, the head of funds structured products at Lehman Brothers said the new product “should act as a natural diversifier in anybody's portfolio from Pensions Funds to Private Clients”. He said Lehman intends to design a variety of structured products linked to it.
The launch comes as hedge fund investors say they are pleased with the performance of the asset class. According to a survey by Hennessee earlier this month, hedge funds met or exceeded expectations for 82% of hedge fund investors. It found that hedge assets rose 5% to 592 billion dollars. And 43% of respondents said they would raise their hedge fund investment in 2003.