Db x-trackers has listed its db Equity Strategies Hedge Fund Index ETF, tracking the performance of 17 long-short and neutral equity hedge funds.
The fund, trading on the London Stock Exchange at an annual total expense ratio of 0.9%, supplements the company's db Hedge Fund Index ETF, which launched two years ago linked to the performance of six core hedge fund strategies.
The Equity Strategies ETF replicates the performance of hedge funds engaged in long-short strategies, where managers hold long positions in equities they expect to rise in value and go short where they expect stocks to fall. The ETF also includes equity market neutral funds, which combine long and short positions to make up an overall market neutral portfolio.
Db x-trackers global head Thorsten Michalik says: "Equity long-short strategies are some of the most popular in the hedge fund universe." The company says all eligible hedge funds will be sourced from the Deutsche Bank Hedge Fund Platform.
By specifying the 17 funds it intends to track, db x-trackers claims its Equity Strategies ETF offers investors the benefits of actual, as opposed to replicated, hedge fund performance.
Deutsche Bank's head of fund derivatives Tarun Nagpal says: "While there are a number of products on the market that attempt to give investors the statistical performance of hedge funds, and thereby try to replicate the beta or alternative beta components of alternative investments, the Equity Strategies Hedge Fund ETF tracks the performance of actual hedge funds.
"It therefore gives investors exposure to alpha return in a product that is as easy to buy and sell as any listed security."
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