AlphaClone ETF Invests In Hedge Fund Equity Positions

May 31 2012 | 8:55am ET

The AlphaClone Alternative Alpha ETF, which began trading on Thursday, will invest in disclosed equity positions held by established hedge fund managers—the first ETF to do so.

The new ETF “seeks to capture alpha from these managers’ long positions while protecting against protracted market downturns through a dynamic hedge mechanism.” Its strategy has been derived from the research and hedge fund replication methodology developed by AlphaClone and its founder and CEO Mazin Jadallah and is based on the passive, risk-managed AlphaClone Hedge Fund Long/Short Index.

The index directly selects its long positions from public disclosures using a proprietary ranking system which measures the efficacy of following managers based on their disclosures over a complete market cycle (since 2000). The index also incorporates a rules-based hedge mechanism that adjusts holdings between being long-only and market-hedged based on certain technical price targets for a broad index of U.S. equities.

“AlphaClone offers our separate account clients strategies that expertly combine long hedge fund equity positions with disciplined downside protection,” says Jadallah, “With the introduction of ALFA, investors around the world can now access our proven investment approach in a transparent and easy to access vehicle that can help navigate today’s challenging market environment.”

The ETF is the first to result from AlphaClone’s partnership with the International Securities Exchange, a leading U.S. options exchange. 

Exchange Traded Concepts serves as investment adviser to the new ETF.  Knight Clearing Services is the lead market maker.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of