Global X Funds launches Top Guru Holdings Index ETF (GURU)

Jun 5th, 2012 | By | Category: Equities

Global X Funds, a New York-based ETF provider, has launched the Global X Top Guru Holdings Index ETF (GURU), a fund which provides investors with exposure to some of the stocks most commonly held by major hedge funds.

Global X Funds launches Top Guru Holdings Index ETF (GURU)

Among the hedge funds tracked by the Global X Top Guru Holdings Index ETF (GURU) is John Paulson's Paulson & Co.

The NYSE-listed fund allows ordinary investors to tap into the combined expertise of some of the largest hedge fund managers, without the customary detractions of hedge fund investing – namely high expenses, liquidity restrictions and minimum investments.

Essentially, the goal of the Global X Top Guru Holdings Index ETF is to aggregate on a quarterly basis the expertise and knowledge of hedge fund managers into the transparent, cost-efficient and easily accessible format of an ETF.

The fund employs a novel but simple technique to achieve this goal. On a quarterly basis, all hedge funds with more than $100 million in US equity investments are required to publish their holdings in a publicly available document called the 13F. It is this source of information that underpins the ETF.

The Top Guru Holdings Index, the fund’s underlying benchmark, uses a proprietary methodology to compile the highest conviction ideas from a select pool of hedge funds where the 13F information is most valuable.

Hedge funds with high turnover and non-concentrated positions are eliminated from the pool. The fund is designed to rebalance quarterly in accordance with the 13F reports to capture any significant position changes and all constituents are weighted equally.

“The Global X Top Guru Holdings Index ETF provides a cost effective solution for investors to access the collective insights of the largest and most sophisticated hedge fund managers,” said Bruno del Ama, chief executive officer of Global X Funds.

With no minimum investment, immediate liquidity and a 0.75% expense ratio, which compares favourably with the 2% management fee and 20% performance fee traditionally charged by hedge fund managers, GURU enables investors to piggy-back on the combined intelligence of some of the biggest hedge fund managers to uncover some of the most attractive investment opportunities.

The index includes some of the most successful names in the hedge fund business, including Angelo Gordon & Co, Appaloosa, Avenue Capital Management, CQS, Farallon, Fortress, GLG Partners, Greenlight Capital, Paulson & Co, Lansdowne Partners and York Capital Management.

Tags: , , , , ,

Leave a Comment