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January 30, 2006
European Union funds request to invest in hedge fund indices rejected
Hedge funds are usually considered riskier than traditional investment tools like stocks and bonds. Keeping this in mind, the request to allow European Union funds to invest in hedge fund indices has been rejected by EU financial market watchdogs. This decision was taken after the Committee of European Securities Regulators, that are a group of market watchdogs from the 25 European Union member states, examined the new assets that could be included in cross-border funds known as UCITS.
Hedge fund indices are an average of returns from a group of hedge funds. These are used to attract traditional investors such as institutions.
The decision largely stems from the complexities of hedge fund indices and the fact that they are still developing. The committee might reconsider its stand towards the end of this year.
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