Rearview Mirror

One of the perceived knocks against following activist investors––or even trying to ape the holdings of successful hedge fund managers gleaned from their public filings––is that it’s a rearview tool that can be dated by the time the filings are made public.

“There’s value in 13Ds and in 13Fs, even if you account for some of the time delays,” Jacobs says. “If a major activist comes out and announces a position in a company, you will see some activity that day because people are excited about it. But the long-term returns are driven by what that activist is able to accomplish, and those campaigns can take a long time.”

Even so, critics accuse activist investors of “pump-and-dump” tactics designed to make a quick buck with little regard for whether they potentially weaken companies over the long term.

But a study released two years ago by professors at Harvard, Duke and Columbia universities analyzed more than 2,000 activist hedge fund interventions between 1994 and 2007. It concluded that activist events, on average, produced a 6% bump in share price in the first month and the stock maintained those gains during the next five years. The study also found a boost in a company’s return on assets and operating performance during that five-year period.

Guru Family

The new ACTX fund joins Global X’s existing suite of three “guru” ETFs. The granddaddy of the bunch, the Global X Guru Index ETF (GURU), launched in June 2012 and has been successful both in terms of assets ($306 million) and performance (annualized gains since inception of nearly 25 percent).

In March 2014, the company on the same day rolled out both the Global X Guru Small Cap Index ETF (GURX) and Global X Guru International Index ETF (GURI). To date, the funds have slightly more than $2 million in assets each, and GURI is up roughly 5 percent while GURX is down about 5 percent.

All three funds carry expense ratios of 0.75 percent.

Two other ETFs––the AlphaClone Alternative Alpha Exchange-Traded Fund (ALFA) and  the Direxion iBillionaire Index ETF (IBLN)––employ 13F filings that track hedge fund managers and other large investors as the basis of their respective strategies.