Highland Capital to Shutter Hedge Fund Replication ETFs

Highland Capital said it will be closing three of its hedge fund strategy exchange traded funds next week.

In a statement, the firm said the Highland HFR Global ETF (NYSEArca: HHFR), Highland HFR Event Driven ETF (NYSEArca: DRVN) and the Highland HFR Equity Hedge ETF (NYSEArca: HHDG) will close on April 11.

“The last day of trading for HHDG, HHFR and DRVN on the NYSE Arca (the “Cessation Date”) is expected to be April 11, 2016, after which the Funds shall cease their business as investment companies and shall not engage in any business activities except for the purpose of winding up their business affairs, preserving the value of their assets, discharging or making reasonable provision for the payment of all their liabilities, and liquidating and distributing their remaining assets to the shareholders of the Funds,” according to the statement.

Highland will continue focusing on he Highland/iBoxx Senior Loan ETF (NYSEArca: SNLN), the firm’s first ETF.

Hedge fund ETFs have become popular with investors that are attracted to the idea of hedge fund investing without the high fees. Between 2008 and 2014, the alternative mutual funds and ETFs space expanded from 482 products to 1,569, with assets growing to $309 billion from $42.6 billion. [Hire Your Own Hedge Fund With ETFs]


“Highland has chosen to focus on core products and will continue offering the Highland/iBoxx Senior Loan ETF (“SNLN”), which seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Markit iBoxx USD Liquid Leveraged Loan Index, a rules-based index consisting of some of the largest, most liquid leveraged loans. SNLN is a category leader in both performance and tracking error and has experienced solid trading volumes. As such, we believe SNLN has favorable prospects for continued growth,” said Highland in the statement.