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AlphaClone launches International ETF

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AlphaClone has launched the AlphaClone International ETF ALFI, which tracks the AlphaClone International Downside Hedged Index that was unveiled last week.

By accessing the investment ideas of the world’s most established hedge fund managers, the ETF seeks to give investors the potential to outperform broader international markets while simultaneously hedging against protracted market downturns. This is the firm’s second ETF on the market – the AlphaClone Alternative Alpha ETF ALFA, +0.16 per cent the first of its kind to track hedge fund holdings, launched in 2012 and has won significant market adoption.
 
“Following similar methodology inside separately managed accounts since 2010, we’re excited to offer an international ETF to help long-term investors navigate international opportunities,” says Maz Jadallah, CEO of AlphaClone. “Our approach seeks to combine the best of man and machine by leveraging the most established investors while offering a rules-based investment methodology.”
 
The index uses AlphaClone’s proprietary Clone Score methodology to continuously score managers based on the efficacy of following their disclosures, then aggregates at least 40 high conviction American Depository Receipt (ADR) holdings from managers with the highest score. Holdings are weighted based on the number of holders and are adjusted and weighted quarterly at pre-defined intervals. The International Downside Hedged Index also employs the firm’s innovative dynamic hedge mechanism that allows it to vary from long-only to market-hedged when the S&P 500 closes below its 200-day simple moving average at any month’s end.
 
“Pursuing the potential for alpha is even more important today for long-term investors given the anaemic growth forecasted for equities and bonds over the next several years,” says Jadallah. “Our strategies seek to offer long-term investors the ability to pursue alpha but with the benefits of a passive investment vehicle.”

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