Alternative exchange-traded funds (ETF) provider ProShares today launched its Hedge Replication ETF, with the goal of providing hedge fund characteristics without the challenges of hedge fund investing.
ProShares officials said the new fund is designed to provide the risk/return characteristics of a broad universe of hedge funds without the illiquidity, limited transparency and high fees associated with hedge funds. The fund's benchmark is based on Merrill Lynch's hedge fund replication model.
"Many portfolios could benefit from the risk/return characteristics of hedge funds, but investors often either can't or don't invest in hedge funds because of a variety of challenges," said Michael L. Sapir, chairman and CEO of ProShares Advisors LLC and ProShares investment advisor. "We are pleased to offer an ETF that addresses challenges of hedge fund investing and may be, for many investors, an attractive alternative to hedge funds."
TheProShares Hedge Replication ETF is listed on the NYSE Arca under the ticker symbol HDG.
HDG is the third ETF in the Alpha ProShares category. The company introduced its first Alpha ProShares ETF, the ProShares Credit Suisse 130/30, in July 2009, followed by its ProShares RAFI Long/Short ETF in December 2010.