A review of 13-f filings by Goldman Sachs has provided interesting details into how hedge funds utilize ETFs. Current hedge fund usage of ETFs differs from that of both individual as well as institutional investors.
Key Goldman Sachs Findings:
ETFs are used as hedging tools rather than as an explicit directional (long/short) trading tool by hedge funds.
Long ETF holdings by hedge funds were down in Q1 2011 to 3% of long assets versus 6% of long assets during the same quarter 2009. This indicates a diminishing reliance on ETFs to provide beta and instead, ETFs focusing on single issue equity and fixed income alpha.
80% of the gross ETFs held by Hedge Funds are used in a short position. ETF shorts are typically concentrated on indexes such as the SPDR S&P 500 ETF (SPY) and the iShares Russell 2000 Index Fund (IWM), which demonstrates the use of ETF as a hedging mechanism versus single company equity positions that a hedge fund may hold.
Source: Goldman Sachs May 19, 2011 Hedge Fund Trend Monitor
Blog RSS Feed
Subscribe via E-mail
Follow Me on Twitter
4:34 am
Interesting. I used short ETF’s for a while.
Brett@Smart Income Investing´s last [type] ..Will the Sarasin Agrisar Fund Grow Profits for Your Portfolio?