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Alternative Market Briefing

Investors looking at other sources for hedge fund-like returns

Monday, September 15, 2014

Komfie Manalo, Opalesque Asia:

Investors who are always on the lookout for higher gains are looking at alternative sources of income, particularly exchange-traded fund industry that generates hedge fund-like returns, according to eFinancial news.

Latest data from ETFGI showed that hedge fund ETFs assets grew by 15% in July since January this year. Hedge fund ETFs try to replicate returns of hedge funds.

According to the ETFGI, hedge fund ETF’s assets grew to $2.26bn in the seven months to end July this year, taking in some $291.1m. The world’s largest fund, IndexIQ’s $796m IQ Hedge Multi-Strategy Tracker ETF, generated another $151m in fresh assets or a rise of 23% during the same period.

Credit Suisse product specialist for alternative fund solutions Dirk Wieringa, said the growth in hedge fund ETFs is due to the increasing demand to low interest rate amongst investors. At the beginning of July, the European Central Bank cut its base rate to 0.05% while the Bank of England maintained the UK base rate of 0.5% for the 66th consecutive month. For its part, the U.S. central bank, the Federal reserve, has kept its interest rate since 2009 at a steady 0.25%.

Wieringa was quoted as saying, "Although markets have been expecting rates to increa......................

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