The Ways ETFs Are Replacing Hedge Funds by Mike Venuto on ETF.com

By Michael Venuto
Toroso Investements
Published in ETF.com

This month, Debbie Fuhr’s London-based ETF consultancy ETFGI made headlines with data showing that global ETP assets are now equal to hedge fund assets. It’s important to note that this inflection point coincides with record assets under management for WisdomTree (WETF).

For those who didn’t make the connection, WisdomTree has 60 percent of its assets in currency-hedged products that were modeled off of established hedge fund trades.

Perhaps the parity reached in the hedge fund assets to global ETP assets can be partially attributed to the role ETFs have played in democratizing exposures that have traditionally only been available to investors willing to pay a 2 percent management fee and 20 percent of their profits with 10-year lockups.

With WisdomTree’s success in mind, we got to thinking: What other hedge fund trades are now available through ETFs, and what else could be done in the future? So, we took a deeper look into this emerging ETF category and here’s what we found…

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