Wilshire announces new indexes for Wilshire Liquid Alternative index

By Tali Rackner

Norfolk, Va., Oct. 8 – Wilshire Associates Inc. announced the launch of five liquid alternative indexes comprising the Wilshire Liquid Alternative index, which was introduced in August and designed as the industry standard for measuring aggregate performance of the liquid alternative mutual fund universe, according to a press release.

The indexes include the Wilshire Liquid Alternative Equity Hedge index, Wilshire Liquid Alternative Event Driven index, Wilshire Liquid Alternative Global Macro index, Wilshire Liquid Alternative Relative Value index and the Wilshire Liquid Alternative Multi-Strategy index.

The new indexes aim to provide relevant and precise performance assessment metrics for the most common liquid alternative investment strategies that are implemented in mutual fund vehicles.

According to the release, a key driver for development of the index family is the wide disparity and lack of common framework when benchmarking liquid alternative investment strategies. Upon review of fund prospectuses for the liquid alternative universe, Wilshire Manager Research concluded that the benchmarks most often used include hedge fund indexes, cash and traditional market indexes. Each of these approaches falls short of providing a relevant performance metric for liquid alternative investment strategies.

“Having first gone through an in-depth process to build a comprehensive liquid alternative mutual fund space that categorizes funds based on our assessment of the strategy they are running, we are able to create strategy-specific indices that align with what managers are actually doing,” Wilshire Funds Management president Jason Schwarz said in the release.

“These five new indices mirror industry-accepted hedge fund categories, but use an apples-to-apples approach given that the underlying index constituents are mutual funds as opposed to hedge funds.

Wilshire is a Santa Monica-based investment consulting and services firm. Its business units include Wilshire Analytics, Wilshire Consulting, Wilshire Funds Management and Wilshire Private Markets.

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