ETF Triangles, A Recipe For Do It Yourself Hedging (QAI, EEM)
Max Rottersman from ETF GUIDE has a recipe for investing in ETF’s. He has created ETF triangles for a guide to create hedging positions with ETF’s using low-correlated triangles. We found it to be an interesting story for you to take a look at.
Rottersman goes on to say “Some firms have been offering “hedge fund” like ETFs, for example, the IQ Hedge Multi-Strategy Tracker ETF (NYSEarca: QAI). Such schemes construct their portfolio with one-part speculative ETF, like the iShares MSCI Emerging Markets Index (NYSEArca: EEM) and one part “hedging” fixed income ETFs. Is paying someone 75 basis points to put most of your money in bonds really hedging? No. True hedging is where you take an opposite position to your long position.”
“If you own high-end retailer Nordsrom, your best hedging play wouldn’t be fixed income, it would be Walmart. The media constantly misuses the term “hedge fund” when they really mean limited (investment) partnership. True hedge funds are very specific about what they hedge and they are only invested in by institutions with positions in which the hedge fund is a good fit. In short, genuine hedge funds are not bought as stand-alone products. They service specific needs. If you don’t understand your need you shouldn’t be in them,” Rottersman Reports.
See Max Rottersman Full Story For Details On The ETF Triangles: Here
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