Some ETFs Ride 13F Filings To The Bank

August 15, 2013

Hedge-fundlike ETFs are standing out in terms of performance.

Some of the world’s biggest hedge funds released their 13F filings yesterday, and two ETFs that are designed to track what hedge funds are up to have made big gains year-to-date.

The Global X Top Guru Holdings ETF (NYSEArca: GURU) is up 27 percent year-to-date through Aug. 14, while the AlphaClone Alternative Alpha ETF (NYSEArca: ALFA) is up 21.3 percent.

GURU tracks an equal-weighted index that attempts to mimic concentrated equity positions taken by large hedge funds, although Global X’s CEO Bruno del Ama said investors should not view the fund as a hedge fund replicator.

“This is not an alternative fund or hedge fund replicator by any means,” del Ama said. “This is not an alternative fund; rather, it's a core U.S. equity fund. This is a long-only fund.”

He told IndexUniverse that the fund currently has a significant overweight position in cyclical growth stocks, and an underweight allocation to defensive stocks. Its top three holdings include Diamondback Energy (2.44 percent), GameStop Corp. (2.32 percent) and Pandora Media (2.26 percent).

GURU currently tracks 13F filings disclosed by some 60 hedge funds including Appaloosa Management, Tiger Management and Silver Lake, according to del Ama. The fund will rebalance its portfolio next week.

For its part, ALFA can add a broad equity hedge position if triggered by a sustained drop in equity prices in addition to tracking 13F filings.

The fund’s top three holdings as of Aug. 14 include Apple (4.97 percent), American International Group (4.69 percent) and Twenty First Century Fox (3.27 percent).

“For investors to really do well, it’s all about accessing the selection skills of these managers,” said Maz Jadallah, chief executive officer of AlphaClone. “Our dynamic hedge is there to protect investors against multimonth drawdowns.”

The fund will rebalance itself on Aug. 27, according to Jadallah.

GURU and ALFA charge 75 and 95 basis points, respectively, or $75 and $95 for each $10,000 invested, which is on par with peer funds, but hardly like SPY’s 0.0945 percent.

Yesterday, hedge fund Paulson & Co. disclosed that it cut its stake by more than half in the SPDR Gold Trust (NYSEArca: GLD) to some 10.2 million shares on June 30, compared with 21.8 million shares on March 31, according to Reuters. Also, Omega Advisors Inc. sold $13.9 million in GLD, $4.39 million of the iShares Silver Trust (NYSEArca: SLV) and $4.35 million of the Market Vectors Gold Miners ETF (NYSEArca: GDX), Bloomberg reports.


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