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

Steinbrugge: Will Hedge Funds Help or Hurt During the Next Market Correction?

Sep 7 2016 | 11:55pm ET

Most investors have become accustomed to quick rebounds when markets correct, but...

Lifestyle

Quattrex Sports AG Debuts Soccer-Focused UCITS Fund

Sep 9 2016 | 9:54pm ET

Innovative alternative investment company Quattrex Sports has unveiled a new UCITS...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...