The reconstitution consists of updating the global list of investable stocks and assigning them to the appropriate indices.
This means that investable indices do not represent the total universe of hedge funds.
Prospective clients need at least 1,000,000 in investable assets, not including real estate.
Here the universe of investable securities is limited by certain criteria based on moral and ethical considerations.
There is also client segregation by investable assets.
To create an investable index, the index provider selects funds and develops structured products or derivative instruments that deliver the performance of the index.
Another term used is net investable assets or working capital.
Thirdly, there has to be the investable funds to follow up those two essential ingredients.
