db X-trackers, Deutsche Bank’s exchange-traded funds (ETF) platform, has listed an ETF that gives financially sophisticated investors access to the performance of leading equity long-short and equity market neutral hedge fund managers.
The db x-trackers db Strategies Hedge Fund Index ETF is currently linked to the performance of 17 hedge funds from 13 alternative investment managers, thereby providing investors with the benefits of exposure to actual, as opposed to replicated, hedge fund performance in a low cost, fully regulated, liquid and tradable security.
“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 returns in a product that is as easy to buy and sell as any listed security,” says Tarun Nagpal, Deutsche Bank’s head of fund derivatives, Europe.
The db Equity Strategies Hedge Fund Index is composed of all eligible funds that follow equity long-short and equity market neutral strategies as sourced from the award-winning Deutsche Bank Hedge Fund Platform.
Equity long-short managers hold long positions in equities they believe will rise in value while going short stocks they believe will fall in value. Equity market neutral managers also combine long and short stock positions, but in addition they typically balance their capital investment in long and short positions to make their portfolios roughly market neutral, overall.
“Equity long-short strategies are some of the most popular in the hedge fund universe. Providing access to managers utilising equity long-short strategies on a stand-alone basis and via a trading tool that is as reliable as an ETF will therefore be welcomed by investors,” says Thorsten Michalik (pictured), global head of db X-trackers.
The Equity Strategies Hedge Fund ETF is listed on the London Stock Exchange.
The new listing complements the January 2009-launched db x-trackers db Hedge Fund Index ETF, which is linked to the performance of six core hedge fund strategies and has to date registered $1.5 billion in assets under management (AUM).
The Deutsche Bank Hedge Fund Platform ensures liquidity, transparency, risk monitoring and independent evaluation of underlying funds. As with all db x-trackers, the Equity Strategies Hedge Fund ETF complies with UCITS III regulations.
The total expense ratio for the Equity Strategies Hedge Fund Index ETF is 0.9% per annum. Index fees, plus management and performance fees at underlying fund level, apply.
