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MSCI Hedge Fund Index Assets Top US$2 Billion

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NEW YORK (HedgeWorld.com)–Assets linked to the MSCI Hedge Invest Index have more than doubled in the past two months and now exceed US$2.1 billion, according to Morgan Stanley Capital International.

Currently 88 hedge funds underlie the investable index, which was introduced about a year ago. MSCI index investments take the form of managed accounts that have weekly liquidity. Paris-based Lyxor Asset Management selects the fund managers and maintains the accounts (see).

This and other hedge fund indexes can be licensed for example by broker-dealers, asset managers, banks and insurance companies and serve as the basis of a variety of financial products, including structured notes.

Index investing in hedge funds, a recent phenomenon, is catching on. Products linked to the CSFB/Tremont* index received more than US$500 million in less than three months and the S&P index had around US$1 billion in assets as of this February (see).

*Tremont Capital Management Inc., Rye, N.Y., is a strategic partner of and a minority investor in HedgeWorld.

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