ARIX Composite Financial Index Methodology

This document is a technical report detailing the Absolute Return Investable Index Composite (ARIX Composite), which is an index of hedge funds constructed using a rules-based methodology. It is maintained by FERI Trust GmbH and has been published since January 2002. The report outlines the index's performance metrics, which reflect total returns from underlying components, including value changes and payouts. The ARIX Composite categorizes funds into four main hedge fund styles: Event Driven, Equity Hedge, Relative Value, and Tactical Trading. Each style employs distinct investment strategies aimed at capitalizing on market opportunities. The document also describes a rating methodology used to evaluate hedge funds, incorporating quantitative and qualitative data, and explains the diversification strategy of the index, ensuring a balanced representation of each style. Furthermore, it details the valuation and computation processes for index components, emphasizing the importance of accurate and timely performance data.