AlphaClone has launched of the AlphaClone International Downside Hedged Index, which is designed to give investors access to the investment ideas of the world’s most established hedge funds, while simultaneously hedging against protracted market downturns.
The index follows the same proprietary Clone Score methodology used by AlphaClone’s flagship AlphaClone Hedge Fund Downside Hedged Index, which has approximately USD170 million in assets currently tracking the index, and has returned an average of 14.35 per cent per year versus 12.40 per cent for the S&P 500 Total Return Index over the three-year period ending 9/30/2015.
Earlier in the year, the firm filed with the Securities and Exchange Commission to register four new exchange-traded funds (ETFs). The ETF that will track the AlphaClone International Downside Hedged Index is anticipated to launch before the end of 2015.
“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 Maz Jadallah (pictured), CEO of AlphaClone. “We’re delighted to introduce an international version of our index, further expanding the number of alpha-seeking index strategies available to global investors.”
The AlphaClone International Downside Hedged Index comprises at least 40 high conviction American Depository Receipt (ADR) holdings selected from the regulatory disclosures of the world’s most established institutional investors. The firm uses its proprietary Clone Score methodology to continuously score managers based on the efficacy of following their disclosures, then aggregates high conviction ADR holdings from managers with the highest score. Holdings are weighted based on the number of holders in each. The index also employs the firm’s innovative dynamic hedge mechanism that allows the index 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.
“Having seen success with our methodology inside separately managed accounts over the past five years, we’re excited to further expand access to our innovative investment methodology and are committed to helping long-term investors succeed,” says Jadallah.
