Credit Suisse, Dow Jones Indexes Launch Liquid Hedge-Fund Index
April 06 2011 - 8:29AM
Dow Jones News
Credit Suisse Group (CS, CSGN.VX) and Dow Jones Indexes said
Wednesday they are launching an "investable" index that allows
investors to track the daily performance and weekly liquidity of
liquid hedge funds.
Several data collectors provide monthly reviews of hedge-fund
performance and quarterly fund flow data; the reviews are based on
money managers' voluntary reporting, which can sometimes be
erratic.
The new index, the Dow Jones Credit Suisse Core Hedge Fund
Index, aims to help gauge the immediate impact of market events,
such as last month's earthquake in Japan or the political tensions
in the Middle East and North Africa.
A person familiar with the situation said the index during its
testing phase dropped more than 1% in the middle of March, but has
since narrowed losses, finishing the first three months of the year
with a 1.17% increase.
The index tracks 40 managed account funds across seven
style-based sectors: event driven, long/short equity, global macro,
emerging markets, managed futures, fixed-income arbitrage and
convertible arbitrage.
Managed accounts, which are owned by individual investors and
monitored by professional money managers, can be redeemed by
investors without the monthly or quarterly constraints imposed by
managers in pooled investments accounts.
The person familiar with the situation said the funds tracked
include some of the best-known ones offered by established
managers, including Paulson & Co.'s Paulson Advantage Funds,
Bridgewater Associates' global macro Bridgewater Pure Alpha fund
and Man Group PLC's (MNGPY, EMG.LN) AHL Trend Fund, which invests
in managed futures.
There was a resurgence in demand for liquid fund structures in
the aftermath of the financial crisis, since many funds restricted
investor withdrawals. Investors became more aware of the importance
of liquidity and transparency in their investments.
"The Dow Jones Credit Suisse Core Hedge Fund Index clearly fills
a void for investors seeking a reliable and trustworthy performance
gauge of liquid, investable hedge funds," said Michael Petronella,
president of Dow Jones Indexes.
Dow Jones Indexes is 90% owned by CME Group Inc. (CME) and 10%
by News Corp. (NWSA, NWS) subsidiary Dow Jones & Co., publisher
of Dow Jones Newswires.
The index is the latest addition to the Dow Jones Credit Suisse
Hedge Fund Indexes platform, which includes several geographical
and strategy-specific hedge-fund indexes constructed from a
proprietary database of more than 8,000 hedge funds.
Investments in hedge funds, which declined during the financial
crisis, have risen as investors have pursued returns uncorrelated
with the broad equities and fixed-income markets.
Hedge-fund administrator GlobeOp on Tuesday said it launched the
GlobeOp Capital Movement Index tracking flows in and out of hedge
funds, based on the roughly 8% to 10% of global hedge-fund industry
assets administrated by the company. It will also release monthly
information on forward redemptions at the funds it administrates,
giving a picture on money coming out of the industry.
-By Amy Or, Dow Jones Newswires, 212 416 3142,
amy.or@dowjones.com
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