ProShares has launched the ProShares Hedge Replication ETF (HDG). HDG’s benchmark is based on Merrill Lynch’s recognised hedge fund replication model. The ETF lists on NYSE Arca today.
HDG seeks to provide the risk/return characteristics of a broad universe of hedge funds without many of the challenges of hedge fund investing. Historically, a broad universe of hedge funds, as measured by the HFRI Fund Weighted Composite Index, has had attractive risk-adjusted returns relative to equities (past performance is not a guarantee of future results). However, there are many deterrents to investing in hedge funds, such as illiquidity, limited transparency and high fees.
"Many portfolios could benefit from the risk/return characteristics of hedge funds, but investors often either can’t or don’t invest in hedge funds because of a variety of challenges," says Michael L Sapir, Chairman and CEO of ProShare Advisors LLC, ProShares’ investment advisor. "We are pleased to offer an ETF that addresses challenges of hedge fund investing and may be, for many investors, an attractive alternative to hedge funds."
HDG is the third ETF in the Alpha ProShares category. Alpha ProShares are designed to provide advanced investment strategies in an ETF and represent ProShares’ further expansion within the alternative ETF space. ProShares introduced its first Alpha ProShares, the ProShares Credit Suisse 130/30 CSM +1.16% , in July 2009 and its second Alpha ProShares ETF, the ProShares RAFI Long/Short RALS +0.0025% , in December 2010.
