Home > Products > MSCI Products > Investable Hedge Fund Indices > MSCI Hedge Invest Indices > Overview

MSCI Hedge Invest Indices
Investable and representative hedge fund indices with weekly liquidity

The MSCI Hedge Invest Index is designed to be both investable and to reflect the overall structure and composition of the hedge fund universe. The composite-level MSCI Hedge Invest Index includes funds from a wide range of hedge fund investment strategies available on a third party hedge fund platform. Eight strategy-level indices subdivide the MSCI Hedge Invest Index and are based on the following clearly defined investment processes:

• Systematic Trading
• Equity Non-Directional
• Discretionary Trading
• Convertible and Equity Arbitrage
• Long Bias
• Event-Driven and Merger Arbitrage
• Variable Bias
• Fixed Income

Each investable hedge fund index contains funds with weekly liquidity and is designed to be licensed for use as a basis for tradable and liquid investment products. As of the July 2008 Quarterly Index Review, the MSCI Hedge Invest Indices consisted of 141 funds and 8 strategy indices.

Summary Description and Benefits

The MSCI Hedge Invest Indices are constructed from eligible funds from the Lyxor platform of hedge funds according to MSCI's Investable Hedge Fund Index methodology

• MSCI Barra classifies the funds according to the MSCI Hedge Fund Classification Standard
• Strategies are weighted by taking into account their weights in the hedge fund universe, as represented by the broader MSCI Hedge Fund Composite Index. Concentration rules control each constituent fund’s weight in the index to limit individual fund exposure

Detailed Benefits and Features

Weekly Liquidity

• Weekly constituent fund liquidity and index capacity rules facilitate the creation of tracker funds and other financial products that aim to replicate index returns

Diversified and Representative

• Strategies in the composite index are weighted by taking into account their weights in the hedge fund universe, using the broader MSCI Hedge Fund Composite Index as a reference
• Specific concentration rules limit individual fund exposure in the composite and the strategy indices
• Strategy-level indices seek to reflect the relative importance of processes and sub-strategies within the particular subset of the hedge fund universe they target

Transparent

• The index methodology is objective, rules-based and fully disclosed
• Constituent information, including fund weightings, is made available to qualified investors

Based on the Lyxor platform of hedge funds

• Eligible index constituents are hedge funds available through Lyxor Asset Management, a subsidiary of the Société Générale Group
• Lyxor is responsible for establishing each individual fund on their platform, conducting initial and ongoing due diligence, monitoring the investment mandate of each hedge fund manager and providing fund valuations independent of each hedge fund manager. MSCI Barra is not involved in managing or maintaining the platform or in identifying specific funds for inclusion on the platform