You don’t need to have a doctorate in mathematics or a finance degree from an Ivy League school to get a piece of the hedge fund action. In terms of employment, that may be the case, but for tailing the smart money hedge fund managers, ETF investors can get exposure via the Global X Guru Index ETF (GURU).

If you ever wondered what goes on in the hedge fund boardrooms, GURU is your fund. It gives you exposure to the industry’s best ideas.

The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Guru Index (“underlying index”). The fund invests at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”) based on the securities in the underlying index.

The underlying index is comprised of the top U.S. listed equity positions reported on Form 13F by a select group of entities characterized as hedge funds. To sum it all up, GURU gives ETF investors:

  • Ideas: GURU allows everyday investors to access the high conviction investments of some of the largest, most sophisticated hedge funds in the world.
  • Alpha Potential: By investing alongside hedge funds, GURU seeks to benefit from their top tier research and knowledge to outperform US equity benchmarks such as the S&P 500.
  • Cost Efficiency: Traditionally, investing with a hedge fund requires paying an ongoing 2% management fee and 20% of profits. GURU has an expense ratio of 0.75%, potentially allowing for greater cost efficiency, while providing access to hedge fund ideas.

GURU Chart

2020: Survival of the Fittest

There’s no doubt that 2020 has been a challenging one for the capital markets, and for hedge funds it’s no different. Nonetheless, its capital Darwinism for hedge funds and those who survive could stand to benefit in 2021 and beyond.

“For years, hedge funds have blamed placid markets for their uninspiring returns,” a Bloomberg article said. “That excuse won’t fly this year. Volatile markets in which stocks move less in lockstep should be a recipe for making money. But much of the industry is struggling, and clients are losing patience.”