HFR Broadens Suite of Crypto Hedge Fund Indices

Hedge Fund Research (HFR) has significantly revamped and broadened its framework for tracking cryptocurrency and blockchain-focused hedge fund strategies with the introduction of 11 specialized sub-strategy indices crafted to deliver more precise and detailed insights into the investment tactics employed within the cryptocurrency and blockchain hedge fund arena.

These include Cryptocurrency Arbitrage, which focuses on sub-strategies that capitalize on price discrepancies across exchanges, over-the-counter (OTC) desks, and different countries; Cryptocurrency Fundamental, which tracks funds that take long and short positions in cryptocurrencies based on a manager’s fundamental investment perspective on each asset; and Crypto Quantitative, which covers strategies that leverage quantitative techniques, analyzing price data, trading volume, and other market metrics

The new indices also include sub-strategies focusing on Multi-Strategy, Volatility and Market Neutral approaches.

HFR has been monitoring cryptocurrency hedge funds since 2017. Over the five-year period ending February, the flagship HFR Cryptocurrency Index delivered an annualized return of 51.4%, translating to a cumulative gain of 694.6%. However, this growth came with significant turbulence, as the index recorded an annualized volatility of 59.5%.

HFR president Kenneth Heinz said the company is applying the same approach to cryptocurrency benchmarking that it pioneered for traditional hedge fund classification, “bringing that same level of specificity and granularity to the fast-moving and ever-evolving crypto hedge fund universe.”