What is Hedge Fund Research Index?

1. What is Hedge Fund Research Index? Investors want to know the performance of hedge funds to ensure that their investment strategies will generate a healthy return on investment (ROI). Therefore, an investment research organization, HFR Inc., maintains databases that track the performance of hedge funds across all regions and strategies. This post will provide an in-depth explanation of what their hedge fund research index means. What is a Hedge Fund? Hedge funds confidentially centralize capital resources from multiple investors. They also allow professional fund managers to allocate them for maximized returns with effective risk management strategies. Hedge fund research services assist investors and hedge fund managers in generating alpha to secure an ROI higher than the documented benchmarks. Fund managers use borrowed money to leverage or trade unconventional asset classes to achieve above-benchmark returns. However, the applications of investment research services vary across all hedge funds. Moreover, proprietary hedge databases offered by Barclays and Eurekahedge often become crucial in performance tracking. Hedge confidentiality and privileged access result in limited fund performance data being available publicly. Nevertheless, advanced research methodologies that source data from top publications help you summarize the trends in hedge asset classes. What is a Hedge Fund Research Index? HFR Inc., founded in 1992, is popular among professional hedge fund research services. This organization leads the research standards in the alternative investment industry. HFRI means hedge fund research index, and HFR Inc. maintains databases to help fund managers analyze hedge fund performance using this HFRI. Hedge fund research indices enable detailed fund classification activities. You can also use HFR databases to access complete historical performance charts. Fund managers can benefit from HFRI integrations in the following investment research services. 1.Relative performance tracking, 2.Benchmarking, 3.Peer analysis. Types of Available Hedge Fund Research Indices 1.HFR’s synthetic fund of fund (FOF)indices can include the funds belonging to the HFRI 500 index. They represent the low, mid, or high volatility performances of each fund of funds, i.e., multi-manager investment funds. Commented [SS1]: Funds of funds? Commented [AP2R1]: Yes, revised plurals to singulars for consistency, and added "multi-manager investment funds" for explanation. 2.However, HFRI 500 indices include hedge funds that allow new investments and offer quarterly liquidity.

2. 3.HFRI institutional indices include single-manager funds using sub-strategies like fundamental growth or sectorial focus, e.g., energy, technology, and healthcare. 4.Additionally, HFRI-I liquid alternative UCITS indices include merger arbitrage and systematically diversified indices. Note that UCITS means undertakings for collective investment in transferable securities. 5.Other indices comprise HFRX, risk parity, blockchain, bank systematic risk premia, and asset manager risk premia. HFR Database The HFR database provides intelligence concerning the performance of 5,800 investment products. It allows investors, fund managers, investment research services, and consultants to study established firms. You can also discover new and emerging managers in the HFR database. This database helps hedge investors analyze funds of funds, liquid alternatives, and managed futures. You can explore several combinations of financial and regional investment strategies utilizing third-party software applications. HFR Index Scope provides you with additional benefits, like extensive historical performance statistics. Besides, both HFR database subscription services update their records thrice per month. Only accredited investors can subscribe to these hedge fund research services. HFR Strategies and Sub-Strategies The HFRIs might employ primary investment strategies like event-driven, thematic, or macro. Relative value, composite strategy, and equity hedge are also available. All hedge fund research services categorize their indices corresponding to such descriptive terms. A sub-strategy explains the priorities of hedge fund research indices with a more granular focus. For example, some hedge fund indices employ an equity hedge (EH)strategy and a “market neutral” sub-strategy. Meanwhile, other indices might use the EH strategy that prioritizes fundamental growth exclusively. Similarly, HFR indices offer 200 to 300 indices to help fund managers and investors enjoy the flexibility of strategic investment research services. Conclusion Predicting and quantifying the performance of hedge funds requires relevant investment research services. Besides, you want internationally recognized performance tracking and benchmarking metrics to increase the reliability of investment strategies. HFR Inc. develops, publishes, and updates hedge fund research indices, i.e., HFRI. It also offers databases and historical performance charts. So, hedge fund managers can make informed decisions to maximize client ROI. SG Analytics is a leading firm facilitating investment research services, allowing investors and hedge fund managers to rebalance analysis for pre- and post-index events. Contact us today to maximize alpha by screening investment ideas and “backtesting” your strategies.