Goldman Sachs Planning ETF Based on Popular Hedge Fund Research

Feb 19 2016 | 11:53pm ET

Goldman Sachs is prepping an exchange-traded fund that will be based on its popular Hedge Fund Trend Monitor research report on equity hedge fund manager activity. 

The proprietary research compiles the 50 companies that matter most to hedge funds as disclosed in their quarterly 13F regulatory filings. The report’s “Very Important Positions” and “Very Important Short Positions” lists have become required reading for those interested in tracking the portfolio movements of well-known hedge fund managers. 

The new fund, named the Goldman Sachs Hedge Fund VIP ETF, will provide retail investors a simple, liquid and inexpensive way to track the top long picks of these managers. It will be based on the Goldman Sachs Hedge Fund VIP Index, which is comprised of the fifty stocks that appear most frequently in the top ten equity holdings of U.S. hedge funds that select investments based on fundamental analysis, according to registration filings with the SEC. The index will rebalance quarterly. 

Goldman’s new fund is not the first one to track hedge fund movements. The Global X Guru Index ETF, which also uses 13F information, and the AlphaClone Alternative Alpha ETF, which uses a proprietary methodology to rank institutional investors, are two examples of similar hedge fund replication strategies.

The SEC filing for the new ETF noted that it will trade on the NYSE Arca exchange, but information about a ticker or fees was not provided. New exchange-traded funds typically go live within six months of filing. 

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