Alphaclone Files For Four New Hedge Fund Replication Funds

Jul 29 2015 | 1:56pm ET

Hedge fund replication specialist Alphaclone has filed regulatory paperwork with the SEC to launch a series of four new smart-beta liquid alternatives aimed at specific areas of the global equities market. 

The ETFs will be passively managed but rely on the proprietary hedge fund position replication methodology developed by the fund’s advisor, Coefficient Capital.

The new funds, which could debut as early as this October, are as follows:

  • The AlphaClone Small Cap ETF will will seek to track the performance of the AlphaClone Small Cap Downside Hedged Index, an index of 150 to 250 small-cap U.S. stocks. 
  • AlphaClone International ETF aims to track the performance of the AlphaClone International Downside Hedged Index, which consists of 40-50 U.S.-listed ADRs.
  • AlphaClone Activist ETF seeks to mimic the Alphaclone Activist Index, which consists of between 40 and 100 U.S. stocks with activist interest based on 13D filings.
  • AlphaClone Value ETF will aim to track the Alphaclone Value Index, which consists of between 40 and 100 U.S. stocks exhibiting a factor-based value tilt.

In each case, the fund’s underlying indices are equal weighted and rank issuers favored as investments by hedge funds and institutional investors based on the efficacy of replicating their publicly disclosed positions, and selects equities from those managers with the highest ranking. They can oscillate between being long only and market neutral.

The four funds join Alphaclone’s current listed product, the AlphaClone Alternative Alpha ETF, which trades under the symbol ALFA and launched in May 2012. For the 12 months ended June 30, 2015, ALPHA returned 14.88%, according to Morningstar.

San Francisco-based Alphaclone also offers a number of discrete strategies as SMAs. 

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