Man Group’s European active-strategy ETF enjoys record inflows

Jun 11th, 2012 | By | Category: Equities

Man Group, Europe’s largest hedge fund manager, has announced that the firm’s Man GLG Europe Plus Source ETF (MPFE), launched in January 2011, has reached assets of over US$550m, making it one of the world’s largest active-strategy equity ETFs. The fund has also been one of the most successful ETFs providing exposure to pan European equities in 2012, both in terms of performance and net new assets.

Man Group's European active-strategy ETF enjoys record inflows

Peter Clarke, CEO of Man Group. The alternative manager's active strategy ETF has enjoyed record inflows.

The success of the Man GLG Europe Plus Source ETF represents some positive news for listed Man Group, which has seen its own share price struggle this year, amid poor performance from the group’s flagship AHL strategy, resulting in the manager’s demotion from the FTSE 100 index of blue-chip stocks.

In addition, the success and positive uptake from investors for the ETF, which was one of the earliest active-strategy ETFs (i.e those seeking to outperform conventional indices) to launch, will be seen as an encouraging sign for the commercial viability of enhanced index and actively managed ETFs.

In contrast to conventional, first-generation ETFs, which track traditional market-cap-weighted indices, the Man GLG Europe Plus Source ETF tracks the Man GLG Europe Plus Index, a proprietary index created by Man Systematic Strategies (MSS). This index is a long-only total return equity index, designed to capture outperformance from broker ideas provided specifically for Man GLG (Man Group acquired GLG Partners in October 2010).

The index uses high-quality ideas from approximately 60 leading brokers to create a liquid, highly diversified equity portfolio. These brokers are backed by approximately 3,000 equity analysts.  MSS aims to further improve the returns from the idea contributors by using a variety of algorithms that detect patterns in the ideas received.

The Man GLG Europe Plus Index has similar market-cap exposure to the broad European equity market, but with the potential for enhanced returns.  From launch of the index on 30 December 2010 to 30 April 2012 the Man GLG Europe Plus Index outperformed the MSCI Europe by 2.1%.  MSS ran a managed account from 2007 using a similar strategy which provides the history to the index; from its inception on 31 December 2007 to 30 April 2012 the strategy outperformed the MSCI Europe by 13.2%, or 2.9% annualised.

MSS was formed in January 2011 – at the time of the ETF’s launch – to combine the expertise of GLG, AHL and Man’s Multi-Manager business. Commenting on the creation of MSS, Peter Clarke, CEO of Man Group, pictured, said: “MSS is an important step in building out our quant excellence into additional systematic products, which are complementary to our core programmes at AHL. This is a strategic priority for Man and I am pleased we have identified this opportunity so soon after the acquisition of GLG.”

Pierre Lagrange, co-founder of GLG Partners said: “We started collecting trade ideas in 2005 at GLG, initially to monitor brokers and then to create strategies using this unique set of broker relationships.  The hurdle rate for the brokers is to beat our internal stock pickers, who are very successful, which raises everyone’s game. We now run $1.25bn using this approach.  It’s been great to see Sandy and Khalil grow it into a significant and innovative investment strategy.”

Ted Hood, CEO of Source, whose ETF platform hosts the Man Group ETF, said: “I am delighted that our cooperation with Man Systematic Strategies has resulted in an ETF that has had broad market appeal. It reaffirms our belief that ETF investors appreciate access to value added strategies and not just plain vanilla beta.”

Khalil Mohammed and Sandy Rattray, co-managers of the strategy, said: “Source has provided an ideal platform for clients to invest in our strategy, using the five Authorised Participants to provide clear best execution, liquidity, transparency and cost effectiveness for clients.”

Aimed at professional investors, the Man GLG Europe Plus Source ETF is listed on Deutsche Börse (Xetra) and trades under the exchange ticker code MPFE. The ETF is passported to Austria, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Sweden and the UK. The ETF has UK reporting status and is eligible for ISAs and SIPPs. It comes with a management fee of 0.75%.

Tags: , , , ,

Leave a Comment



More in Equities
UBS rolls out currency hedged MSCI Europe ETF on Borsa Italiana
Italian equity ETFs are the “best-looking in the European ugly parade”

Vince Stanzione, a high-profile private investor, says that investing in Italy offers investors an excellent bet. Italy's major stock market index, the MIB,...

Global X Funds launches Top Guru Holdings Index ETF (GURU)
Global X Funds launches Top Guru Holdings Index ETF (GURU)

Global X Funds, a New York-based ETF provider, has launched the Global X Top Guru Holdings Index ETF (GURU), a fund which provides...

Close