FTSE’s investable hedge fund index series FTSE Hedge went live today with initial cash and commitments of over $300m, and more money coming in at the end of the month.
“We have had a good reception from structured products providers, and plans are afoot for structured products both in the UK and internationally,” said Mark Ellis, director of the investable indices’ management company, MSS Capital. Ellis said he had more faith in the product than he had ever done and was delighted with the broad mix of institutions taking up the product.
FTSE Group ceo Mark Makepeace added, “FTSE Hedge… provides the transparency needed by global investors seeking to access the hedge fund asset class. The early success of the index is a strong indicator that it has been well received by the market."
FTSE Hedge’s opening value is based on the net asset values (NAVs) of the constituents on 31 May 2004. A five-year back history is available.
Investable hedge fund indices choose underlying funds as representative of the risk reward characteristics of a given strategy group, and bundle them into a fund of funds-type structure managed by a specialist manager such as MSS Capital.
The underlying hedge fund managers commit a certain amount of capacity to the index fund manager, and the money invested in the indices goes directly into the hedge funds that make up the index.
