The Horizons Morningstar Hedge Fund Index ETF, which gives investors exposure to the Morningstar Broad Hedge Fund Index, has been awarded one of the 2012 William F Sharpe Indexing Achievement Awards.
HHF was given the award for Best ETF Innovation, which recognises outstanding innovation in ETF development, at the Global Indexing & ETFs conference in Phoenix, Arizona
“We are very honoured to be recognised for such a high profile award. The William F Sharpe awards are essentially the Oscars of indexing and ETF investing.” says Howard Atkinson, chief executive of Horizons ETFs. “This is a Canadian made ETF solution that is being recognised as a groundbreaking innovation, which effectively gives investors index exposure to the global hedge fund universe – something which was thought of as impossible not too long ago.”
The Horizons Morningstar Hedge Fund Index ETF seeks investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, which replicate the performance of the Index, hedged to the Canadian dollar.
The index is a broad-based hedge fund index developed by Morningstar, which contains more than 500 constituent hedge funds. The index seeks to capture the performance and behaviour of highly liquid hedge funds offering exposure to a wide variety of core and category trading strategies, but is itself not investable.
“Morningstar has, in our view, the best of the best hedge fund indices, and this index captures the most important aspects of investing in hedge funds, such as absolute returns, portfolio diversification and lower volatility,” says Atkinson. “HHF uses an innovative hedge fund replication strategy initially developed by Innocap Investment Management and then implemented by National Bank of Canada, which allows investors to get similar exposure to the returns of the Morningstar Broad Hedge Fund Index.”
HHF does not invest directly in the constituent hedge funds of the Index. Instead, it seeks to replicate, as closely as possible, the performance of the index using a replication strategy licensed from National Bank of Canada, which is implemented by Fiera Capital, the sub-adviser to HHF. The replication strategy uses liquid futures contracts on several different asset classes, including equity indices, currencies, fixed income securities and commodities.
In addition to winning the award, HHF was also a finalist in the ETF Product of the Year category. The index replication process used by HHF was nominated for Best Indexing Product.