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Global X Funds, a New York-based provider of exchange-traded funds (ETFs) with more than $3 billion in managed assets, has unveiled two new “Guru”-themed ETFs, which seek to participate in the ideas of some of the world’s most sophisticated investors.
Listed on the NYSE Arca, the Global X Guru Small Cap Index ETF (GURX) and Global X Guru International Index ETF (GURI) tap into the highest conviction ideas of a select group of hedge funds and other institutional investors.
The ideas are uncovered via an analysis of the 13F filings – essentially a quarterly report of equity holdings filed by institutional investment managers with at least $100 million in equity assets under management – of a select group of longer-term, buy-and-hold-style hedge funds and institutional investors identified from various sources.
Both the funds are linked to newly launched Guru indices from Solactive, a Frankfurt-based index provider. The international ETF is linked to the Solactive Guru International Index, and holds 50 US-listed foreign domiciled stocks (including ADRs), while the small-cap ETF is linked to the Solactive Guru Small Cap Index, and invests in 100 US companies with a market capitalization between $100 million to $3 billion. Both indices are equal weighted.
Commenting on the launch of the new funds, Bruno del Ama, chief executive officer of Global X Funds and portfolio manager for the funds, said: “There is a strong foundation in academic literature for the value of 13F filings. To properly derive this value, however, you need a well-defined methodology that filters for the right information. There’s a lot of data out there, and the Guru funds are designed to invest only in the stocks where we believe the value of this information is greatest.”
Jay Jacobs, research analyst at Global X Funds, added: “The latest round of filings shows that many hedge fund managers continue to move out of cyclical stocks and take more defensive positions. The methodologies utilized by the Guru funds strive to eliminate the noise in 13F filings and uncover where these managers are focusing their investments.”
The new ETFs complement the existing Guru ETF, the Global X Guru Index ETF (GURU), which launched in June 2012 and is currently ranked among the top 1% of US large-cap core equity funds, according to Lipper. With more than $500 million in assets and having been ranked by Bloomberg as the “Best Niche ETF” in 2013, this fund has established itself as the market’s premier ETF to track hedge fund strategies.
All three ETFs in the Guru family have total expense ratios of 0.75% per annum.