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Wilshire launches five liquid alternative sub-strategy indices

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Wilshire Associates has launched five liquid alternative sub-strategy indices, which now comprise the Wilshire Liquid Alternative Index.

The main index was introduced in early August and designed to serve as the industry standard for measuring aggregate performance of the liquid alternative mutual fund universe.
 
The new indices aim to provide relevant and precise performance assessment metrics for the most common liquid alternative investment strategies that are implemented in mutual fund vehicles.
 
The additional suite of targeted indices includes 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 offering leverages the intellectual capital of two distinct Wilshire business units: Wilshire Funds Management and Wilshire Analytics. Wilshire Funds Management, the investment management arm of the firm that works with financial intermediaries globally, advises on over USD150 billion in assets, including traditional and alternative investment strategies. Wilshire Analytics is the technology foundation of Wilshire and creator of the Wilshire 5000, a measure of the US stock market.
 
A key driver for development of the Wilshire Liquid Alternatives 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 indices, cash and traditional market indices. 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 categorises 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,” says Jason Schwarz, president of Wilshire Funds Management. “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.
 
“As the liquid alternatives mutual fund segment continues to expand and mature, new tools are needed to ensure that investment managers and financial advisors are able to bucket, assess and communicate performance of the most common liquid alternative investment strategies.”
 
“We are thrilled to introduce the next series of liquid alternatives indices to our broad market standard. The gap in the marketplace is clear, and we believe Wilshire is uniquely positioned to leverage its rich history and combined assets to help pioneer a path toward a relevant market standard in a quickly evolving space,” says Cecilia Loo, president of Wilshire Analytics.

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