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Credit Suisse Index: Hedge Funds Declines, Team Releases White Paper

Max Skjönsberg

7 October 2011

Hedge funds, as measured by the Credit Suisse Liquid Alternative Beta Index, fell by 3.41 per cent last month and are now down 4.36 per cent year-to-date versus a loss of 15.36 per cent for the Dow Jones Global Index.

Additionally, the alternative beta strategies team has released a report looking into the challenges facing hedge fund investors in uncertain markets. The white paper, called Hedge Fund Investing: How to Optimize Your Portfolio, examines how hedge fund replication can be used to help mitigate risks that are inherent in investments of the kind.

“Over the past few years, exceptionally volatile markets have left hedge fund investors faced with a number of specific challenges, including a lack of transparency and liquidity, along with cash drag, the diminished performance that comes from holding too much cash,” Jordan Drachman, head of research for alternative beta strategies at Credit Suisse, said in a summary of the report. “As a result, hedge fund replication, which aims to track the performance of hedge fund indices without investing directly in hedge funds, has grown in popularity as investors seek to manage their hedge fund allocations more efficiently.”