While the popularity of hedge fund indices has soared over the past few years – evidence of their growing importance as a window into a particularly opaque asset class – there are still big question marks over their usefulness, and, in some cases, even validity.
Unlike most other types of index – be they for stocks, bonds or more esoteric assets such as carbon credits – hedge fund indices do not attempt to capture pricing for a specific, easy-to-define class of security.
