ETF provider ProShares has teamed up with Morningstar to launch an ETF designed to offer advisors a one-stop solution based on a Morningstar index consisting of seven different alternative strategies.

The ProShares Morningstar Alternatives Solution ETF, with the ticker symbol ALTS, is intended to help advisors and investors who seek to allocate a portion of their portfolios to alternative investments but don’t want to spend the time studying a smorgasbord of different choices and then determining their own allocations.

According to ProShares CEO Michael Sapir, the alternative investment landscape is challenging many advisors. “Home offices are telling them to allocate a slice of 15 percent to 20 percent of their portfolios to alternatives and they are struggling at picking individual ETFs,” Sapir said. “It can be overwhelming. Our impression is that many don’t do anything as a result.”

ProShares, a leading provider of alternative ETFs, approached Morningstar Investment Management and its Ibbotson Associates unit about a year ago to develop an alternative investment index. According to Scott Wentsel, chief investment officer of the Americas for Morningstar Investment Management, they developed a momentum-type model that will be rebalanced monthly.

Wentsel says the weightings can change between 5 percent and 10 percent from their long-term targets. Current weightings are hedge fund replication (22 percent); long-short equity (24 percent); merger arbitrage (11 percent); managed futures (6 percent) ; breakeven inflation (2.5 percent); global infrastructure (16 percent); and listed private equity (18 percent).

The long-term target weightings are hedge fund replication (20 percent); long-short equity (18 percent); merger arbitrage (17 percent); managed futures (10 percent); breakeven inflation (10 percent) ; global infrastructure (9 percent); and listed private equity (16 percent).

Wentsel says the current allocation overweighting reflects the momentum model’s result that long-short equity is “the place to be right now.” The tiny allocation to breakeven inflation obviously reveals the current sentiment that inflation is not a near-term fear.