Global X's GURU Gets New Name, New Family

October 25, 2013

Global X simplifies the name of its GURU ETF as it prepares to expand its lineup of funds.

Global X Funds, the firm most known for its niche strategies, has simplified the name of its Global X Top Guru Index Holdings Index Fund (GURU | C-48), which, starting today, is now known simply as the Global X Guru Index ETF, in a rebranding effort that aims to pave the way for the launch of an entire family of GURU funds.

GURU, tracking the equal-weighted  Solactive Guru Index whose name was also made shorter today, is essentially a hedge-fund-replicating ETF, and so far this year, it’s also the best-performing fund in the segment, with total returns of 44 percent in the past one year.

The fund is a U.S. equities strategy that tracks what the so-called “smart money” is doing by looking at hedge fund managers’ 13F filings—hedge fund managers are required to report their equity holdings to regulators through these filings no more than 45 days after the end of a given quarter.

Global X’s decision to simplify the nomenclature associated with the fund and its index is just a step in an ongoing process to build a GURU family of funds, which will comprise at least two additional strategies for which the firm submitted a registration statement this week.

  • The Global X GURU Value Index ETF will, like its predecessor, be built around 13F filings, but with a focus on value investors selected from a universe of hedge fund managers that aim to buy securities that appear undervalued based on fundamental analysis, according to the prospectus. Value investors must have minimum reported holdings of $1 billion to be eligible, and as of the end of September, there were 20 value investors used for the construction of the index. The fund will carry an expense ratio of 0.65 percent a year, or $65 per $10,000 invested.
  • The Global X GURU Activist Index ETF, similarly, will hone in activist investors, or those who aim to buy securities to put public pressure on its management to increase shareholder value, the filing said. Activist investors must have minimum reported holdings of $500 million in their form 13F to be eligible. At the end of September, there were 11 activist investors used for the construction of the Underlying Index. The fund will cost 0.75 percent per year.

The quick growth of GURU has been mostly performance-driven, Global X’s Research Analyst Alex Ashby told IndexUniverse in a recent interview, arguing that investors appeared to be interested in GURU’s methodology from the get-go, but it took some strong performance to really get them hooked. GURU costs 0.75 percent a year.

Since the fund came to market on June 4, 2012, it has gathered $222.8 million in assets, and it has consistently outperformed the broad U.S. stock market, as a comparison with the SPDR S&P 500 ETF (SPY | A-100) shows in the chart below:

GURU_SPY_One_Year_Performance

Chart courtesy of StockCharts.com

 

 

 

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