ETFs provide inexpensive access to the broad stock market.
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Dusseldorf The task of hedge funds is actually to beat the market with their customers’ money – i.e. to achieve a higher return. They succeed in doing this primarily through intensive analysis when selecting the individual stocks.
However, hedge funds also rely on exchange-traded index funds (ETFs), which are popular with private investors. This is shown by a Handelsblatt analysis of the portfolios that professional investors have to report to the US Securities and Exchange Commission once a quarter. The current data (as of March 31) was published this week.
ETFs passively track the performance of an index, so investments are broadly diversified at low costs. Bridgewater, one of the world’s largest hedge funds, even has five ETFs in its top 20 positions, SEC filings show. Together they accounted for more than 16 percent of the entire portfolio. The Handelsblatt presents which ETFs are involved.
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