Patent ID: 7818241

Claim:
A computer implemented method for balancing an index of a plurality of hedge funds, the method comprising: calculating, using a computer system, a hedge fund weight for a hedge fund included in the index; determining, using the computer system, if the calculated hedge fund weight exceeds a hedge fund weight maximum, the hedge fund weight maximum corresponding to a maximum proportion of the total index that can be allocated to a particular fund; determining, using the computer system, if the calculated hedge fund weight is less than a minimum hedge fund weight, the minimum hedge fund weight corresponding to a ratio of a required capacity for the particular fund or exposure to the particular fund to the net exposure of the index; and adjusting the percentage of the index allocated to the particular fund if the calculated hedge fund weight exceeds the hedge fund weight maximum or is less than the minimum hedge fund weight; wherein the minimum hedge fund weight for the particular fund is less than the maximum hedge fund weight for the particular fund; and wherein the hedge fund weight maximum is equal to or less than a ratio of the capacity to an index notional amount, the capacity corresponding to a total amount that can be invested in the hedge fund and the index notional amount indicating the total monetary amount associated with financial products based on the hedge fund index.