Beta blockers

4 February 2004 By Chris Hughes

FTSE’s Hedge Index will be restricted to respectable funds that are at least 2yearsold, externallyaudited, and open to new investors. But only 40 out of 6,000 hedge funds qualify. The question is whether the reason they have room for new money is that they don’t perform.

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FTSE Group, the UKbased index provider, is launching an index of hedge funds and is to license fund managers to create funds based on the index.

FTSE Hedge, as the index is called, will be calculated on a daily basis and will comprise 40 hedge funds, with eleven subindices covering the major hedge fund strategies.

Harcourt Investment Consulting is to perform due diligence tests for each constituent hedge fund.

The move follows similar launches by CSFB/Tremont, Standard & Poor's and HFR. CSFB's socalled investible index showed a return of 11.2% last year, against the 15.4% achieved by its main hedge fund index which also includes funds that have closed to new money.

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