Van Eck Launches Liquid Alternative Funds

Dec 2 2014 | 9:54am ET

New York-based money manager Van Eck Global has launched a pair of liquid alternative funds.

The first fund is actually a reboot of an existing fund: The Van Eck Long/Short Equity Fund will now be known as the Van Eck Long/Short Equity Index Fund—the first long/short equity index mutual fund to be offered in the United States.

The firm also launched the Variable Insurance Portfolio Long/Short Equity Index Fund, an investment option available within variable annuity contracts.

Van Eck said both funds will seek to track, before fees and expenses, the performance of the Market Vectors North America Long/Short Equity Index.

“These funds are unique because they offer investors access to the risk and return profile of an index of long/short equity hedge funds, with all the liquidity and transparency benefits of a mutual fund, and a net expense ratio that is well below the Morningstar Long/Short Equity category average,” said David Schlasser, director of manager research at Van Eck Global, in a statement.

“While this innovative strategy has been utilized by institutional investors through separately managed accounts since 2011, we are now excited to make it more broadly accessible. We believe that this launch is timely given the rising concerns about high fees and the variability of returns associated with individual hedge fund strategies, whether in mutual fund or partnership form,” said portfolio manager Marc Freed, who has been working on the index for 12 years. Van Eck acquired the intellectual property behind the strategy in 2012 from Lyster Watson, a fund of hedge funds.

Van Eck, a major sponsor of ETFs under the Market Vectors brand, believes the rising concern among institutions about fees is illustrated by the California Public Employees' Retirement System's recent decision to exit from its hedge fund investments.

The MVLSNATR Index implements a rules-based methodology that is designed to identify and reflect the long-term themes of a select peer group of North America-focused long/short equity hedge funds.

Founded in 1955 by John C. van Eck, Van Eck Global currently manages assets on behalf of 400 clients. Headquartered in New York City, Van Eck Global has a presence in China, Germany, Spain, Switzerland and Australia.


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