The Credit Suisse Long/Short Liquid Index ETN debuted on Monday February 22nd under the ticker “CSLS.” CSLS looks to be another exchange traded offering that gives retail investors exposure to hedge fund strategies and will track the Credit Suisse Tremont Long/Short Equity Hedge Fund Index, which was formed by Credit Suisse Alternative Capital in 2009.
The Target Index that CSLS will monitor was comprised of 153 hedge funds as of January 29th and focuses on funds with a minimum of $50 million in assets under management. Managers of the funds tracked by the Target Index can shift between long and short positions as well as moving from value to growth postures or vice versa. They can also use equity futures and options as methods of generating alpha.
Both long/short and hedge fund exchange traded products have seen an increase in total offerings in recent months as they fall under the category of actively managed ETFs and ETNs. As of mid-December 2009, there were six long/short ETFs or ETNs available to U.S. investors with a combined market cap of less than $200 million. Volume across these six funds is far from impressive
Led by IndexIQ, more hedge fund ETFs are also coming to market. But again, these offerings lack decent volume. The methodology used by long/short and hedge fund exchange traded products can be downright confusing for many investors, so we would recommend consulting with your financial advisor before making a capital commitment to these funds to ensure you know exactly what the fund's methodology and objectives are.
Disclosure: No positions
- More on choosing the right ETF
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