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Hedge Fund Index For Traders

New York, NY, September 17, 2002 - Following the general introduction of the S&P Hedge Fund Index earlier this year, Standard & Poor's, a leading global provider of indices and benchmarks, today announced the components of the index, the list of which is available at www.standardandpoors.com.

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Standard & Poor's has also published a white paper that details the structure and methodology of the index, expected to be launched shortly.

"By screening for funds that demonstrate style purity and requiring that they provide daily transparency, Standard & Poor's offers a breakthrough benchmarking tool for this traditionally secretive corner of the investment universe," said Paul Aaronson, Executive Managing Director, Standard & Poor's. "The S&P Hedge Fund Index measures the performance of a diverse array of hedge fund strategies in use by managers today. The index is designed to be investable and provide a means to indexed investment in hedge funds through licensed products that replicate it."

Forty hedge funds make up the S&P Hedge Fund Index, which is divided into three "style" sub-indices, Arbitrage, Event-Driven and Directional/Tactical. The Arbitrage sub-index includes Equity Market Neutral, Fixed Income Arbitrage, and Convertible Arbitrage strategies. The Event-Driven sub-index includes Merger Arbitrage, Distressed and Special Situations strategies. The Directional/Tactical sub-index includes Long/Short Equity, Managed Futures, and Macro strategies. The index is equal weighted to ensure well-rounded representation of hedge fund investment approaches and to avoid over-representation of strategies that are in favor at the time (see pages 8-9 of the white paper for further clarification).

The hedge funds included in the S&P Hedge Fund Index have been selected by Standard & Poor's Index Committee following a rigorous due diligence process conducted along with hedge fund consultant, Albourne Partners Ltd. Funds are screened in an effort to ensure that they are appropriately managed, adhere to their stated strategy or style, and maintain all necessary risk controls and operational infrastructure. Other criteria for index inclusion include level of assets under management, length of time the fund has been in existence, tenure of the fund manager and willingness to grant daily transparency for daily index calculation. A decision to include a hedge fund as a component of the S&P Hedge Fund Index does not reflect an endorsement by Standard & Poor's or anyone else of the investment merits of the fund.

S&P Publishes Hedge Fund Research
Also released today is a white paper offering details on the index methodology and structure as well as research on the representativeness of the index.

"We believe the S&P Hedge Fund Index components include representative examples of funds in the respective strategies," said Peter Roffman, Vice President, Standard & Poor's. "The median AUM of components in the S&P Hedge Fund Index is approximately $530 million and the median track record in the strategy is six years."

Standard & Poor's, a division of The McGraw-Hill Companies, provides independent financial information, analytical services and credit ratings to the world's financial markets. Among the company's many products are the S&P Global 1200, the world's first real-time, investable global equity index, the S&P 500, the premier U.S. portfolio index, and credit ratings on more than 220,000 securities and funds worldwide. With more than 5,000 employees located in 18 countries, Standard & Poor's is an integral part of the global financial infrastructure. For more information, you can visit www.standardandpoors.com.