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What is the Hedgenordic (NHX) index?
An equal weighted index tracking the performance of all Nordic hedge funds based on the following categories: Equity Strategies, Fixed Income Strategies, Multi Process/Diversified, Managed Futures and Fund of Funds. Equal weighted calculation entails, that the return of each fund in the index has the same weight in the index. The index is based on data reported directly to HEDGENORDIC by the hedge fund managers themselves.
Which hedgefunds are included in the NHX index?
The index exclusively tracks the performance of all hedge funds managed in the Nordic region: Denmark, Norway, Sweden and Finland.
Why is the AUM data important, if we can choose to hide it anyway?
Your AUM is used in the calculation of the NHX index. It is an important part of the data we publish and therefore, your fund cannot be part of the index without providing HEDGENORDIC with your AUM information.
Why is it important that all our funds are included in the NHX index and not only our most successful funds?
To make the index value exact. The absence of some of the funds will result in an inaccurate index calculation.
Why is it necessary for us to provide AUM information for a closing fund?
To make the index as accurate as possible for the time period in which the closing fund has been active. This will make the index accurate and account for survivorship bias.
How many of the Nordic hedge funds are represented in the NHX index?
By our assessment, the vast majority of the Nordic hedge funds are included in the NHX index, although probably not all. However, all the major, most significant funds of the region are represented in the index.
How is HEDGENORDIC different from other Nordic hedge fund databases?
HEDGENORDIC is the only online service provider of its kind to feature a combination of index data, database information, global and regional news as well as events hosting and various educational tools. This combination is specifically designed in order to accomodate to professional investors (i.e. banks, pension funds, insurance companies, fund of funds etc.). Being included in the NHX index should therefore provide your fund with excellent investor exposure.
How much does it cost to be included in the NHX index?
Inclusion in the index is free. However, access to the hedge fund database as well as to the news and knowledge sections requires a subscription which cost €950 per year.
How do we benefit from exposing our fund in the NHX index?
We are confident that the unique combination of indices, database information, news, events and educational tools featured on the HEDGENORDIC website will provide you with unique, one of a kind exposure to desirable types of investors.
Do we have access to the performance data of the other managers?
No, not without subscribing to HEDGENORDIC.
What is a hedge fund?
A hedge fund is an alternative investment vehicle which is different from traditional investment funds in a number of ways. The legislative requirements are less restrictive for hedge funds. This allows hedge funds to use a number of financial instruments and investment tactics which are off limits to traditional investment funds. For instance, hedge funds are allowed to use high leverage and can go short in a number of markets, e.g. stock, securities, currency and commodities markets.
What is "hedging"?
Hedging is another word for risk management. The fund managers apply hedging techniques in order to mitigate a certain type of risk. Types of risk hedged against include: market risk, inflation risk, long exposure risk, interest rates and large sector weightings (region, sector, company, currency). Hedging techniques include raising cash and selling short as well as buying/selling options, futures or commodity.
Do all hedge funds "hedge"?
No they don't. Some funds have high risk levels, often long stocks, and they may use leverage if necessary. It is central that the hedging degree is carefully researched when investing in a hedge fund. Only that way can the risk return relationship be properly determined.
What investment strategies do hedge funds employ?
Basically, every investment strategy which exists. However, the majority of hedge funds use equities in their investment strategy. Other investment strategies include Fixed Income, Multi Strategy, Distressed Debt, Event Driven, Global Macro, CTA/Managed Futures and a significant number of other strategies. Since hedge funds for the most part have been unregulated investment vehicles there exists no single classification strategy. Some of the major financial institutions have developed their own internal classification strategy. The most well established are those developed by CSFB, MSCI, S&P, Barclays Group, HFR and most recently our Nordic index (Hedgenordic by Netposten).
Are all hedge funds aggressive risk takers?
No, a number of hedge funds, particularly in recent years as institutional investors have entered the hedge fund investment business focusing exclusively on generating stable, consistent returns by employing low risk investment strategies.
What are hurdle rates?
The minimum investment return a fund must generate before it is eligible to take a performance allocation or an incentive fee.
What are lock-up periods?
The amount of time during which assets cannot be removed from the hedge fund.
Who typically invest in hedge funds?
Pension funds, insurance companies, fund of funds, endowments and qualified clients.
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FAQ