CS/Tremont Launches Emerging Markets Index |
Date: Monday, April 7, 2008
Author: Bill McIntosh, Senior Financial Correspondent, Hedgeworld.com
LONDON (HedgeWorld.com)—The Credit Suisse/Tremont Hedge Fund Index Group is launching a diversified index that aims to capture the high growth potential of the emerging market economies of Latin America; emerging Europe, the Middle East and Africa (EEMEA); and Asia. The CS/Tremont LEA Index will have a constituent fund list as well as monthly and weekly publishing of performance data on www.hedgeindex.com. The LEA Index will have semi-annual rebalancing and will be made up of 42 constituent hedge funds in the LEA universe with weighting determined by LEA Index rules. "LEA represents the overall performance of this region-specific, emerging market hedge fund universe through a rules-based methodology," said Oliver Schupp, president of Credit Suisse Index Co. Inc., in a statement. "It offers systematic insight into the performance of hedge funds that seek to take advantage of the investment opportunities and inefficiencies in these three regions which are currently experiencing improved creditworthiness, strong domestic consumer demand and large inflows of foreign direct investment." The criteria for being a component of the index will see member funds determined by size of assets under management in each region. Member funds will need to meet compliance terms including providing timely performance reporting, audited financials and offering memorandum review for inclusion. The index firm estimates there are about 500 hedge fund managers in the emerging markets investable hedge fund universe, of which around 100 fit their criteria. With Asia and other emerging markets seeing the launch of increasing numbers of hedge funds, it is likely that the number of funds the new index can draw on will grow rapidly. Long/short equity is the most represented strategy, with 23 funds in the index and 50% of the total assets under management. Multi-strategy is the second most represented type of fund with 16 funds representing 37% of the total AUM. Global Macro only has two funds in the index but they account for 12% of its assets, while convertible arbitrage has one fund accounting for 1% of assets. The index has 15 funds based in Asia, accounting for 40% of the assets, and 16 funds in Latin America representing 37% of assets. EEMEA is the home of 11 funds, accounting for 23% of assets.
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