Desjardins unveils long/short Canadian equity ETF

Jan 30th, 2019 | By | Category: Alternatives / Multi-Asset

Desjardins Global Asset Management has launched the Desjardins Alt Long/Short Equity Market Neutral ETF (DANC CN) on the Toronto Stock Exchange.

Desjardins Alternative Long Short ETF

Desjardins Global Asset Management celebrated the launch of DANC by participating in a market opening ceremony at the Toronto Stock Exchange on 30 January 2019.

The actively managed hedge-fund-style ETF provides market-neutral exposure to a portfolio of Canadian stocks.

The fund invests in pairs of correlated stocks (generally within the same industry sector) that neutralize the net market value of long and short positions, thereby reducing sector biases and market exposure.

The strategy thus seeks to achieve stable positive returns and low volatility in all market conditions.

“With changes in mutual fund regulation we are very excited to offer investors our unique market-neutral paired equity strategy that aims to offer absolute and uncorrelated returns in all market conditions”, said Nicolas Richard, Chief Executive Officer of Desjardins Global Asset Management.

While DANC will primarily hold positions in Canadian equities, the fund’s prospectus notes it has the flexibility to invest in equities listed worldwide. The ETF may use leverage created through the use of cash borrowings, short sales, and derivatives, up to a maximum aggregate exposure of 300%.

Long/short strategies have historically exhibited low correlation to most major asset classes, highlighting their potential benefit as diversifiers in traditional portfolios.

The fund comes with a management expense ratio (MER) of 1.00%. Distributions are made to investors on a quarterly basis.

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