Credit Suisse has launched a new fund providing access to more than 180 hedge funds through a passive investment strategy using the Credit Suisse Tremont Hedge Fund Index as its benchmark, with daily liquidity incorporated into the product.
The Credit Suisse/Tremont Index Strategies Fund uses the Credit Suisse/Tremont Hedge Index Tracker as its underlying fund, which is designed to deliver the performance of the whole hedge fund universe, but it has some adaptations that make it more applicable to participants in the local market.
“What we’ve done for the Australian market is apply two times leverage and daily liquidity,” Credit Suisse product specialist, funds and alternative solutions, in Australia Kate Wilkie said.
The features that were included for domestic investors were determined from detailed focus groups Credit Suisse conducted, which sought the opinions of researchers, heads of dealer groups, and advisers.
The fund also possesses better reporting and transparency procedures compared to competing products in the market, which is often the reason why similar products are not included on leading investment platforms.
“In terms of taxation, reporting traditional hedge fund investments, given the liquidity being monthly or quarterly, it can often take three or four months to get taxation reports and those for the end of the financial year. In the case of the Credit Suisse fund, we think it will be about one or two weeks,” Wilkie explained.
In addition to these characteristics, the new fund offers a more cost effective method of investing in hedge funds as well due to the fact a management fee of only 0.1 per cent per annum on net asset value is charged without an additional performance fee due to the passive nature of the underlying investments. The product is also hedged against foreign currency fluctuations.
According to Credit Suisse national research and platform manager Alex Haynes, the fund is predominantly aimed at self-managed super fund members.
The Credit Suisse/Tremont Index Strategies Fund will be available on the BT Wrap and MLC MasterKey Custom platforms from July 1. The manager is awaiting ratings from some of the recognised research houses before looking to have the offering included on other major platforms and the approved product lists of financial planning dealer groups.
Last year the Credit Suisse Tremont Hedge Fund Index delivered a net return of 11.5 per cent in US dollar terms.
