The Man Group today will launch its first hedge fund exchange-traded fund, designed to profit from brokers' best ideas.
The Man GLG Europe Plus Source ETF will use an algorithmic system to trade on brokers' buy recommendations. Hundreds of these will be aggregated and rated; the brokers with the winning tips will win the trades based on those tips, the Financial Times reports. The system is similar to that employed by Marshall Wace Asset Management for its Tops program.
The Man fund will not trade on sell recommendations, however; Tops does.
The new strategy, one of the first joint products offered by Man and GLG Partners, which Man acquired last year, is the brainchild of Man's quantitative research group, MSS. That unit this month also launched a tail risk fund, Man Tail Protect, one of several so-called "black swan" funds—which seek to profit from extreme, unlikely moves in the market—to debut recently.
The ETF's strategy is already being used in a managed account for a single large client, according to the FT. The ETF is expected to list with about US$260 million, before "intensive" marketing begins next month.