alternative asset: turnover exactly, about

Walex

in hedge fund index, sometime it mention about fund turnover in the index, what does it exactly mean? Thanks.

kkn006

That generally refers to the index being re-constituted as some hedge funds are eliminated from the index and others are added to the index. When hedge funds close they may be removed from a particular index and when a new hedge fund opens they may be added to the index. Different hedge fund indexes have different rules.

Similar concept to portfolio turnover: selling one thing and buying another, but here you're simply removing one manager and adding another.