Unlimited Unpacks Hedge Fund Alpha With Launch Of ETF Without High Fees, Lock-Up Features

As investors wrestle with macroeconomic volatility, Unlimited is making hedge fund strategies ETF-compatible.

What Happened: On Tuesday, the firm introduced the Unlimited HFGM Global Macro ETF HFGM, an innovative actively managed fund designed to track the positions and returns of global macro hedge fund managers, without the high fees or lock-up features.

HFGM employs proprietary, data-driven models to replicate how hedge fund macro managers are positioned. It achieves this by taking long and short positions in liquid futures contracts and ETFs on equities, fixed income, currencies, credit, and exchange rates.

Also Read: The Dividend ETF That Just Woke Up And Why Investors Are Watching Closely

“Our Global Macro ETF was designed to offer a volatility target aligned with equity markets as an investor-friendly way to add the diversification features of alts to a balanced portfolio,” CEO Bob Elliott said.

Global macro funds are famed for their versatility and ability to produce alpha regardless of what’s happening in the general equity or bond market. But availability has traditionally been reserved for institutions, until now.

With a 1% management charge, HFGM avoids the common “2 and 20” structure. The goal is to provide a substantially lower-cost alternative with exposure to hedge-fund-like strategies. The fund also aims for a similar level of volatilities as equity markets, making it a diversifier of traditional portfolios.

HFGM leverages the company’s previous success with the Unlimited HFND Multi-Strategy Return Tracker ETF HFND, which blends a number of hedge fund strategy exposures. HFGM takes and separates the global macro element of HFND to provide a more concentrated alternative.

Why It Matters: The HFGM launch is the first in a series of focused ETF launches planned by Unlimited. Unlimited already has two other funds approved for sale by the SEC: Unlimited HFMF Managed Futures ETF, and Unlimited HFEQ Equity Long/Short ETF

Both are scheduled to launch later this year. The initiative is part of Unlimited’s overall plan to untangle hedge fund alpha into liquid, easily tradable ETF vehicles.

Macro-driven strategies are reemerging into the limelight as central banks move in opposite directions on policy and geopolitical tensions worsen.

With ETFs’ evolution ongoing, Elliott is pitching HFGM as a way to make high-end institutional blueprints available for retail investors.

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