Method and system for creating and operating an investable hedge fund index fund
First Claim
1. A method of creating and managing an index fund based on an index of funds of hedge funds, comprising:
- identifying potential funds for an index of funds of hedge funds;
identifying which of the potential funds meet specific criteria selected so as to minimize biases;
creating an index by indexing funds identified as meeting the criteria;
constructing a portfolio of funds in the index; and
allocating capital to funds in the portfolio.
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Abstract
A preferred embodiment of the present invention comprises a method of creating and managing an index fund based on an index of funds of hedge funds, comprising steps of (a) identifying potential funds for an index of funds of hedge funds; (b) identifying which of the potential funds meet specific criteria selected so as to minimize biases comprising selection bias and survivorship bias; (c) creating an index by indexing funds identified as meeting the criteria; (d) acquiring a portfolio of funds in the index; and (e) allocating capital to funds in the portfolio.
The invention also comprises software to perform the steps of the method described above. In particular, the invention comprises software wherein data regarding potential funds is stored in a database according to object role modeling. A preferred database structure is described.
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Citations
48 Claims
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1. A method of creating and managing an index fund based on an index of funds of hedge funds, comprising:
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identifying potential funds for an index of funds of hedge funds;
identifying which of the potential funds meet specific criteria selected so as to minimize biases;
creating an index by indexing funds identified as meeting the criteria;
constructing a portfolio of funds in the index; and
allocating capital to funds in the portfolio. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16)
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17. Software for creating and managing an index fund based on an index of funds of hedge funds, comprising:
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software for identifying potential funds for an index of funds of hedge funds;
software for identifying which of the potential funds meet specific criteria selected so as to minimize biases comprising selection bias and survivorship bias;
software for creating an index by indexing funds identified as meeting the criteria;
software for constructing a portfolio of finds in the index; and
software for allocating capital to funds in the portfolio. - View Dependent Claims (18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32)
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33. A system for creating and managing an index fund based on an index of funds of hedge funds, comprising:
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a database storing potential funds for an index of funds of hedge funds; and
a processing unit in communication with said database, the processing unit operative to;
identify which of the potential funds meet specific criteria selected so as to minimize biases comprising selection bias and survivorship bias;
create an index by indexing funds identified as meeting the criteria;
construct a portfolio of funds in the index; and
allocate capital to funds in the portfolio. - View Dependent Claims (34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48)
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Specification