How is the Credit Suisse LEA Hedge Fund Index constructed?
The member funds in the index represent the largest of the eligible funds by assets under management (“AUM”) in each of the three regions of the index: Latin America, EEMEA (Emerging Europe, Middle East and Africa) and Asia. Please see the Methodology section of this site or the Credit Suisse LEA Hedge Fund Indexes Rules Document for additional eligibility definitions, rules and technical specifications.
How does the Credit Suisse LEA Hedge Fund Index differ from the original Credit Suisse Hedge Fund Index and the other Credit Suisse Hedge Fund Indexes?
The Credit Suisse LEA Hedge Fund Index and three subindexes are a suite of region-specific hedge fund indexes encompassing funds that have emerging markets exposure in the three regions of Latin America, EEMEA and Asia. Unlike the Credit Suisse Hedge Fund Index, the index includes only open, or investable, funds, similar to the Credit Suisse AllHedge Index and the Credit Suisse Blue Chip Hedge Fund Index. When defining open funds and other terms for eligibility, Credit Suisse Hedge Index LLC relies on information provided to it, its affiliates and any third party advised by it. The Credit Suisse Hedge Fund Index includes closed funds. The index can therefore include funds that may generally be closed. Funds in the index are also selected solely from the set of funds that meet specified eligibility conditions.
More specifically, what is the difference between the Credit Suisse LEA Hedge Fund Index and the Credit Suisse AllHedge Index?
The index is designed to capture the specific niche market comprised of hedge funds representing the regions of Latin America, Emerging Europe, Middle East & Africa (EEMEA), and Asia. These Emerging Markets are believed by many to provide higher growth opportunities than the aggregate universe of global hedge funds. Many Emerging Markets funds of the Credit Suisse AllHedge Index invest in emerging economies globally without any particular regional focus while the Credit Suisse LEA Hedge Fund Index is comprised of hedge funds with specific regional exposure.
Does the Credit Suisse LEA Hedge Fund Index use net or gross data?
Index data is net of all fees. Further, the index is calculated net of a 0.10% per month index calculation fee.
Are funds of funds included in the Credit Suisse LEA Hedge Fund Index?
No. Funds of funds are not included in the index.
Are funds that are closed included in the Credit Suisse LEA Hedge Fund Index?
Yes. Funds that are generally closed for new investment may be included in the index.
When did the Credit Suisse LEA Hedge Fund Index begin?
The index commenced with a starting value of 100.00 as of April 1, 2008. Back-tested pro forma historical performance data* for the period prior to April 1, 2008 (i.e., calculations of how the index might have performed in the past if it had existed), relies on significant assumptions, and is provided for informational purposes only. As with all historical performance data, it may not be used to predict future characteristics or performance of the index or relied on in making any investment decisions. Past performance is no indication or guarantee of future performance.
Does the Credit Suisse LEA Hedge Fund Index include managed accounts?
No, managed accounts are excluded from the Credit Suisse LEA Hedge Fund Index and the Credit Suisse Hedge Fund Index.
If a fund manager has both an onshore fund and an offshore fund, can both be included in the Credit Suisse LEA Hedge Fund Index?
No. Only offshore funds are included in the index. However, should a manager have both an onshore fund and an offshore fund, the sum of their respective assets is used to determine the weight of the offshore fund in the index.
How often is the Credit Suisse LEA Hedge Fund Index rebalanced?
The index and subindexes are rebalanced semiannually. Rebalancings take effect each April 1 and October 1 (each a rebalancing effective date), based upon selections and weights that are determined on or about the previous December 15 or June 15 (each a rebalancing selection date), using the latest data available to the calculation agent. Please see the Methodology section of this website or the Credit Suisse LEA Hedge Fund Indexes Rules Document for additional information.
Can a fund be removed from the Credit Suisse LEA Hedge Fund Index for reasons other than changes in AUM?
Yes. A fund can be dropped from the index at the semiannual rebalancing for reasons other than changes in AUM if any of the following occur:
- The fund does not comply with the reporting requirements
- The fund fails to comply with the Rules relating to the provision of financial information
- The fund ceases operation following liquidation
How are new funds added or removed from the Credit Suisse LEA Hedge Fund Index?
The index is rebalanced semiannually. member funds are added and removed on a "going forward" basis only. Please see the Methodology section of this site or the Credit Suisse LEA Hedge Fund Indexes Rules Document for additional information.
How long a track record must a fund have to be eligible to be included in the Credit Suisse LEA Hedge Fund Index?
Funds must have a current audited financial statement and a minimum one-year track record to be eligible for the index.
Will historic performance data be adjusted as new funds are added to the Credit Suisse LEA Hedge Fund Index?
No. Any new funds added to the index will contribute on a "going-forward" basis only. The historic monthly figures will not be adjusted.
Will there be corrections to the Credit Suisse LEA Hedge Fund Index?
Any adjustments will be made on a "going-forward" basis only, as is the typical practice with all other major hedge fund indexes.
How soon after month end will the new Credit Suisse LEA Hedge Fund Index figures be released?
Index figures are typically released on the 15th of each month or the subsequent business day (should the 15th fall on a holiday or weekend). Index values may be calculated from estimated performance as reported by the managers. As a result, on each publication date, the most recent month's estimated rate of return and index value will be published along with the previous month’s confirmed rate of return.
Will the performance and asset figures of the funds denominated in currencies other than U.S. dollars be converted into U.S. dollars?
Yes. All figures are converted into U.S. dollars.
Is the Credit Suisse LEA Hedge Fund Index affected by survivorship bias?
Most indexes are affected by some form of survivorship bias. In order to minimize this effect, the index does not remove funds in the process of liquidation, and therefore captures most of the potential negative performance before a fund ceases to operate. If a fund begins to liquidate, its performance remains in the index until it fully liquidates and ceases to operate, at which time it is removed because it no longer meets investability requirements. Please see the Methodology section of this site or the Credit Suisse Hedge Fund Indexes Rules Document for additional information.
Does the Credit Suisse LEA Hedge Fund Index track the sectors of the Credit Suisse Hedge Fund Index?
The index was constructed as an investable, liquid, region-specific index containing subindexes with their own characteristics, and thus performance may be significantly different.
Wouldn't an index comprised only of open funds underperform since all good funds are closed?
Credit Suisse AG, an affiliate of the index publisher Credit Suisse Hedge Index LLC, has relationships with a number of closed funds that have agreed to participate in the index regardless of their closed status. Further empirical evidence suggests that closed funds do not necessarily outperform open funds.
* Important Legal Information Regarding Hypothetical, Back-Tested or Simulated Performance: the hypothetical performance is for illustrative purposes only and does not represent actual performance. The Credit Suisse LEA Hedge Fund Index (Index) was launched April 1, 2008. Simulations for the Index were conducted to measure how a portfolio of hedge funds would have performed in the period beginning January 1, 2005 through March 31, 2008. All simulations were conducted by Credit Suisse Hedge Index LLC. The Index does not represent that the hypothetical performance pre-dating April 1, 2008 would be similar to actual performance of the Index. Hypothetical, back-tested or simulated performances have many inherent limitations only some of which are described as follows: they are designed with the benefit of hindsight, based on historical data, and do not reflect the impact that certain economic and market factors might have had on the decision or rule-making process. No hypothetical, back-tested or simulated performance can completely account for the impact of financial risk in actual performance. Therefore, it will invariably show positive returns. The information is based, in part, on hypothetical assumptions made for modeling purposes that may not be realized in actual performance. No representation or warranty is made as to the reasonableness of the assumptions made or that all assumptions used in achieving the returns have been stated or fully considered. Assumption changes may have a material impact on the model returns presented. There are frequently material differences between hypothetical, back-tested or simulated performance results and actual results subsequently achieved by any investment strategy. Unlike an actual performance, hypothetical, back-tested or simulated results are achieved by means of the retroactive application of a back-tested model itself designed with the benefit of hindsight. The back-testing of performance differs from actual performance because the allocation rules may be adjusted at any time, for any reason and can continue to be changed until desired or better performance results are achieved. The Index is not a security and cannot be purchased.