Societe Generale Asset Management has launched the SGAM ETF T-Rex on the Euronext Paris exchange and, along with IndexIQ, is one of the first firms to embrace hedge fund ETFs. IndexIQ is readying a series of five ETFs that track hedge fund strategies (FA, 9/15). The SocGen fund tracks the HFRX Global Hedge Fund Index, which is down 9% this year.
Paul Justice, ETF strategist at Morningstar, said while the timing could be perceived as questionable because of the terrible year hedge funds are having, SocGen is heading in a direction he expects many other firms will. "The perceived need for a product like this will exist over market cycles. Bringing it to the forefront, they are filling a need regardless of what the market has done over the past year and this is a good move for them," said Justice. He added that other providers who are not financially strong right now might be biding their time until markets improve.
Jolyon Barthorpe, spokesman for SocGen, said that despite the downturn in the hedge fund market, "We believe in the capacity of the industry to protect capital as it did in 2000-2002 especially in relative terms to equity managers," and by launching now the fund will be in a position to capture the eventual upturn in the markets.
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