Paris-headquartered investment platform iM Global Partner and New York-based investment manager Dynamic Beta Investments have partnered on their second ETF: the iM DBi Hedge Strategy ETF (DBEH US).
Andrew D. Beer, Managing Partner of Dynamic Beta Investments.
The fund is actively managed and provides exposure to a long/short global equity strategy based on the asset allocations of leading hedge funds.
The fund seeks to outperform the pre-fee performance of the largest long/short global equity hedge funds from the Hedge Fund Research database by using futures and forward contracts to invest across equities, fixed income, and currencies.
The strategy uses a proprietary quantitative model to identify the main drivers of performance amongst this diversified pool of leading long/short equity hedge funds. It then uses derivatives to mimic these aggregate exposures while targeting an annualized portfolio volatility between 8-10%.
The strategy is typically reset on a monthly basis.
The approach diversifies away the single manager risk associated with individual hedge funds, providing exposure to a diversified portfolio of equity long/short strategies within a single ETF wrapper.
Many individual long/short equity funds employ a market-neutral approach; however, due to the aggregate nature of the ETF’s strategy, it is expected that the fund will not have a beta of zero and will have some exposure to the direction of the market.
The ETF will invest in investment-grade debt securities with an average duration of less than one year to collateralize its derivatives investments and to enhance yield.
The fund has listed on NYSE Arca and comes with an expense ratio of 0.85%.
The pair’s first ETF – the iM DBi Managed Futures Strategy ETF (DBMF US) – debuted on NYSE Arca in May 2019. It provides actively managed exposure to a managed futures strategy based on the asset allocations of leading hedge funds. This ETF also comes with an expense ratio of 0.85% and has accumulated some $20m in AUM since launch.
Jeffrey Seeley, Deputy CEO and Head of US Distribution of iM Global Partner, commented, “iM Global Partner is delighted to continue to work with Dynamic Beta investments to bring another innovative alternative investment ETF to market in an easily accessible, affordable, and efficient solution. This is iM Global Partner and DBi’s second alternative ETF launch. The iM DBi Hedge Strategy ETF fills an important role for investors and further rounds out the alternative investment offerings already available on iM Global Partner’s multi-asset distribution platform.“
Andrew Beer and Mathias Mamou-Mani, both Managing Members of Dynamic Beta Investments, added, “The iM DBi Hedge Strategy ETF exemplifies Dynamic Beta’s mission: provide investors with innovative alternative investment solutions with low fees and daily liquidity and minimize single manager risk. Alternatives play a crucial role in minimizing risk and volatility, and we are happy to continue to work with iM Global Partner to provide investors with unique and useful investment vehicles.”