Thu, Jul 27, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Aon Hewitt retirement and investment blog: Hedge fund indices as benchmarks

Friday, May 12, 2017

Executive Summary

Where clients are looking to benchmark hedge fund investments against a relevant market, or peer average, we recommend that clients use HFRI Fund Weighted Indices as opposed to indices from other providers or the newer Asset Weighted indices from HFRI.

In some situations it will be appropriate for clients to use other indices or benchmarking methods. The most common of these that we foresee is investments in CTA or trend-following managers, where HFRI do not publish an index specifically targeting this strategy. In this case we recommend clients use the SocGen CTA Trend Indices, the most widely known provider of indices for this strategy.

It is important to note there is no perfect hedge fund benchmark since none of the peer averages are both truly comprehensive and investable.

Introduction to Hedge Fund Indices as Benchmarks

When analysing hedge funds (unlike traditional investment strategies), there are not widely accepted security level benchmarks such as the MSCI All Countries World Index and JPMorgan Global Bond Indices. This, along with the fact that two hedge fund managers that call themselves Global Macro funds (for instance) may have vastly differing investment styles, makes benchmarking hedge funds notoriously tricky.

Over time, it has become conventional for hedge fund indices to take the form of peer group benchmarks. This means that they are composed of the returns of underlying hedge funds rather than individual......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Hedge fund CQS favors structured credit, Direct lending funds' fading all-weather appeal, Funds hunt for cracks in most-prized US shopping malls[more]

    Hedge fund CQS favors structured credit From BArrons.com: A hedge fund manager that can invest across the investment landscape says in his latest semi annual report this week that he's finding opportunities in structured credit -- particularly the shorter term, floating rate kind. Exampl

  2. Launches - Bitcoin hedge fund launches ethereum-subscribed ICO investment vehicle, Jersey players institutionalize first regulated crypto-currency hedge fund[more]

    Bitcoin hedge fund launches ethereum-subscribed ICO investment vehicle From Coindesk.com: The operators of a regulated, Jersey-based bitcoin hedge fund have officially closed a new $5 million fund aimed at investing in cryptocurrency tokens and initial coin offerings (ICOs). Backed by fun

  3. SWFs - China Wealth fund backs TPG lender as part of U.S. property push[more]

    From Bloomberg.com: China Investment Corp., the sovereign wealth fund that controls $814 billion in assets, is betting on U.S. real estate by investing in a commercial real estate lender formed by the money management firm TPG. In conjunction with last week's initial public offering of TPG RE Financ

  4. Months to minutes: Enigma launch aims to boost crypto hedge fund creation[more]

    From Coindesk.com: What if starting a hedge fund was as easy as downloading an API? A startup incubated at MIT Media Lab is today revealing a product designed with this ease-of-use in mind. Called Catalyst, the first product offering by blockchain startup Enigma aims to trigger nothing short of an e

  5. Seward & Kissel launches new compliance service[more]

    Bailey McCann, Opalesque New York: The law firm that formed the first hedge fund - Seward & Kissel - has launched a new compliance service for asset managers. Seward & Kissel Regulatory Compliance, or SKRC, offers full-scale regulatory compliance consulting solutions provided by the firm's attor