EACM100® Index
Description
Index Description
The EACM100® Index is an equally-weighted composite of 100 hedge funds selected by EACM Advisors LLC (EACM) to be a representative sample of the various hedge fund strategies available to investors. EACM100® is designed to be an intelligent benchmark, with manager participation based on both quantitative and qualitative factors.
The EACM100® Index is available in two versions. The original index, which has a more than nine-year live performance record, tracks a carefully selected group of onshore funds. Starting in 2004, EACM began offering an offshore companion index to follow offshore clones of the onshore funds in the original index. Offshore funds have become an integral part of the hedge fund industry and the EACM100® Index – Offshore Funds is designed to provide a relevant benchmark for those focused on that segment of the market.
Construction
The EACM100® Index is not a database. It is an investable group of 100 investment managers, chosen by the investment professionals at EACM to effectively sample the universe of hedge fund styles. Managers are grouped into 5 broad investment strategies, which are further cut into 12 sub-strategies. Performance results are calculated at each level to provide a better understanding of strategy and sub-strategy performance. The Index is useful as a diversified composite of hedge fund styles or as selected strategies and/or sub-strategies.The EACM100® Index is designed to mimic a reasonably constructed fund of hedge funds product. Specific strategy weights are set by EACM, using an investment-driven approach. The Index is equally balanced between non-directional strategies (relative value, event-driven, and short selling) and directional strategies (equity hedge funds and global asset allocators). Within the strategy groups, managers are generally equally distributed among the sub-strategies. EACM reserves the right to alter the strategy weighting scheme, but the strategy weights have remained the same since inception of the original index. Individual managers are always equally-weighted at the beginning of each calendar year, with each manager representing 1% of the total index. This approach provides a useful framework for analysis and avoids the pitfalls of a haphazard grouping of managers whose strategy weights are solely determined by availability of data.
Manager Selection
Performance is not the key factor to manager selection. The investment professionals at EACM carefully review the investment discipline of each manager and select only funds which are representative of a specific trading style. Inclusion in the Index is not contingent on any prior business arrangement with EACM, nor do investment managers pay any fees to participate. However, managers do agree to a number of terms and conditions.Each manager must have at least a two-year live performance record, a minimum of $20 million in the investment strategy, be open for new investments, and provide at least annual liquidity. Only managers with both an onshore and offshore version of the same product can be considered. Managers also agree to provide monthly performance results on a timely basis, including any and all revisions, and to provide fund documentation, such as offering memoranda and audited financials. Performance is also not a cause for removal from the EACM100®. Funds are dropped from the Index for a variety of reasons, but poor performance will result in removal only where a blow-up situation occurs and the fund dissolves. During a blow-up situation, the complete results of the ailing fund are reflected in the Index totals. More common reasons for manager replacements include straying from the investment strategy, a lack of adequate assets under management, not being open to new investments or simply closing-up shop. The manager line-up is reviewed on an annual basis and substitutions are made at the beginning of each calendar year. In the case of managers dropping out during the year, a special rebalancing is performed at mid-year. Manager selection or removal is not a capricious act, it is a well thought out decision, made only after careful review.
EACM agrees not to disclose individual manager names, and publicly disseminates only information and performance results on the Index and its strategy components. All underlying performance data reflects the performance of investment vehicle(s) represented by the investment managers to be representative of all accounts managed pursuant to a designated investment strategy and is net of such managers’ stated fees, but does not reflect any pro forma calculation of EACM fees. All such performance data and representations are not independently verified or approved by EACM, and EACM makes no representations as to their accuracy. EACM does not undertake to correct or to update this information in any way.
The EACM100® Index is intended for informational purposes only, and does not constitute advice or an offer, solicitation or endorsement with respect to any investment strategy or vehicle. Past performance is not indicative of future results.
For further information regarding the EACM100® Index, please email your inquiry to eacm100@eacm.com
Now available final results for March 2005 March
2005
Newsletters
Download Returns
EACM100 Onshore
EACM100 Offshore
Historical
Data Revisions
Permissions
Further Info?
EACM100@eacm.com