The index will be calculated daily, and will include sub indices covering the major hedge fund strategies.
It will only include open hedge funds with a proven two-year track record and strict external audits, according to a press release. FTSE also said that each constituent hedge fund will be tested by an independent hedge fund consultant, Harcourt Investment Consulting AG. The list of included funds will be available when the index is introduced in April.
Additionally, FTSE said it will issue licenses to individual fund managers, allowing them to generate funds based on the index, which will also be available in April.