Index tracks minority-owned hedge funds

Hedge Fund Research has introduced the HFRX Diversity Index, a benchmark designed to reflect the performance of the minority- and women-owned hedge funds. The index tracks hedge funds that are managed by firms in which the management company is more than 50% owned by a U.S. citizen who is either a member of an ethnic minority group or a woman. The index, which will be rebalanced on a quarterly basis, contains over 100 vehicles, with the majority (38.6%) holding between $1 billion and $5 billion in assets. HFR estimates that there are 7,500 hedge funds worldwide. Inclusion in the index is based exclusively on equity ownership in the management company and excludes funds of hedge funds. Hedge funds with under $50 million; and between $250 million and $500 million each occupied 22.7% of the index. Chicago-based Hedge Fund Research said that in back-testing, the index produced an annualized net return of 11.26% since it was first tracked on Jan 1, 2003. "The index is driven by institutional investors who are interested in knowing more about women and minorities as a growing constituency," said Ken Heinz, president of HFR.