Exchange traded funds provider Global X Funds has launched the Global X Top Guru Holdings Index ETF, which allows investors to tap into the combined expertise of the largest hedge fund managers.
Hedge funds spend tens to hundreds of millions on talent and research to uncover the most attractive investment opportunities, and in exchange typically charge a 2% management fee and a 20% performance fee. These types of asset management firms are often restricted to a limited number of investors and typically require a large minimum investment that makes them difficult to access. However, on a quarterly basis, all hedge funds with more than USD100 million in US equity investments are required to publish their holdings in a publicly available document called the 13F.
The goal of the Global X Top Guru Holdings Index ETF (GURU) is to aggregate on a quarterly basis the expertise and knowledge of hedge fund managers into the transparent, cost-efficient and easily accessible format of an ETF–with no minimum investment, immediate liquidity and a 0.75% expense ratio. The Top Guru Holdings Index uses a proprietary methodology to compile the highest conviction ideas from a select pool of hedge funds where the 13F information is most valuable. Hedge funds with high turnover and non-concentrated positions are eliminated from the pool. The Fund is designed to rebalance quarterly in accordance with the 13F reports to capture any significant position changes.
"The Global X Top Guru Holdings Index ETF provides a cost effective solution for investors to access the collective insights of the largest and most sophisticated hedge fund managers," says Bruno del Ama, chief executive officer of Global X Funds.