Alternative Investments: This ETF Copycats Top Hedge Funds and Undercuts Their Fees
The iM DBi Hedge Strategy ETF (DBEH) invests in long and short positions in the most liquid domestically traded futures contracts.
Launched in December, the iM DBi Hedge Strategy ETF (DBEH) is an actively-managed ETF. Its objective: to match or outperform the largest Global Equity Long/Short hedge funds from the HFR (Hedge Fund Research, Inc.) database.
iM DBi Hedge Strategy ETF (DBEH) strategy
The ETF enters domestically traded futures and forwards contracts of assets such as equities, fixed income, and currencies.
Further, the fund comes from the stable of iM Global Partner and Dynamic Beta investments.
“iM DBi Hedge Strategy ETF (DBEH) is an active ETF that seeks to potentially outperform the average Global Long Short Hedge Fund by using a factor-based replication strategy to identify the current long and short drivers of pre-fee performance of select leading Global Long/Short Hedge Funds,” said iM Global Partner’s Jeff Seeley.
“DBi uses a systematic model to analyze the recent pre-fee performance history of a portfolio of forty large Long/Short Hedge Funds to estimate the current core ‘factor weights’ – exposures across key equity and other markets – of those funds. The ETF portfolio is then built using highly liquid US future contracts to approximate the net exposures of those funds. The portfolio is rebalanced monthly,” further explains Seeley.
DBEH: Benefits for investors
The key benefit is lower fees versus the typical hedge fund. Further, the fund avoids the risk from using a single fund manager, as well as the drawdowns from single-stock exposures.
Furthermore, by simultaneously investing in both DBEH and in its sister ETF iM DBi Managed Futures Strategy ETF (DBMF), an investor can create a stable, absolute return-like portfolio. This portfolio, therefore, benefits from global equity bullishness (DBEH) and bear market protection (DBMF).
On 12/26/2019 the ETF declared a dividend of $ 0.0040 per share payable on December 31, 2019 to shareholders of record as of December 30, 2019.
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