Credit Suisse has launched three new indices on its Liquid Alternative Beta (LAB) platform of asset management business to replicate the performance of major hedge fund strategies as well as the overall hedge fund universe.
The three new indices, Liquid Alternative Beta Index, the Event Driven Liquid Index and the Merger Arbitrage Liquid Index, join the existing LAB Global Macro and Long/Short Liquid Indices, to provide insight into the performance of the overall hedge fund industry as well as the largest and popular hedge fund sectors in the current market environment.
LAB is a series of indices that seek to replicate the aggregate return profiles of alternative investment strategies using liquid, tradable instruments that are selected and weighted using an objective and transparent rules-based methodology. An algorithm determines the appropriate factors and weightings employed in seeking to replicate the returns of specific hedge fund strategies.
The LAB family of indices includes five separate indices which are valued daily and returns listed on Bloomberg.
Jordan Drachman, head of research for alternative beta strategies within asset management at Credit Suisse, said: “In the wake of current investor sentiment, liquid alternative beta strategies are gaining in popularity due to their ability to provide risk/return characteristics similar to those of hedge funds. These strategies can provide portfolio diversification benefits and can also be used as a transition management tool, a hedging tool or as a liquidity buffer for institutional investors and fund of hedge funds.”