The HFRX Diversity Index, a benchmark designed to reflect the performance of the minority- and women-owned segment of the hedge fund industry, has been launched by Chicago-based Hedge Fund Research (HFR).
To qualify hedge funds must be managed by firms in which the hedge fund management company is more than 50 per cent owned by a US citizen who is either a member of an ethnic minority group or a woman. Since January 2003, the number of such hedge funds in the HFR Database has more than doubled to over 100.
Calculating the historic performance of the Diversity Index going back to 1 January 2003, it outperformed many broad-based indexes of hedge fund performance and produced an annualised net return of 11.26 per cent.
“We have seen a tremendous amount of interest from major pension fund sponsors and other institutional investors in an index that tracks the performance of minority- and women-owned hedge funds,” said HFR president Kenneth Heinz.
“We created the HFRX Diversity Index to provide these investors with a benchmark for understanding and analysing the performance of these firms.”