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MSCI Investable Index Up and Running

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NEW YORK (–The MSCI Hedge Invest Index, a new investable hedge fund index, went live with weekly performance as of July 22.

MSCI first said it would be offering the index in June in response to investor demand for investability Previous HedgeWorld Story. The new index is separate from MSCI’s Hedge Fund Indexes, which are sold on a subscription basis.

MSCI is taking an approach that is reminiscent of that used by Standard and Poor’s and PlusFunds Inc., which together are creating hedge fund portfolios indexed to the S&P Hedge Fund Index. (PlusFunds officials say it has US$600 million under management in S&P-linked portfolios.)

MSCI will manage the investable index using separate accounts that are owned by Lyxor Asset Management, a unit of Soci?t? G?n?rale Group, Paris, but managed by external hedge fund managers. Lyxor also will use the index as the basis for a tracking fund.

The index also is available for licensing to other asset managers, funds of funds and broker-dealers interested in creating funds derivatives and structured products, according to MSCI.

MSCI will offer weekly pricing and liquidity, as compared to S&P’s daily pricing and liquidity. Currently, the index contains 64 funds within 11 hedge fund processes. MSCI expects to add more funds as they qualify.

Funds in the index are priced as of the close on Tuesdays and will be published on Fridays by noon Eastern Time, according to MSCI. The MSCI Hedge Invest Index was down 0.37% in its first week, compared with the MSCI World Equity Index, which fell 1.36%, and the MSCI World Sovereign Debt Index, which fell 0.37%.

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