NEW YORK (TheStreet) -- Building on the success of the Global X Guru ETF (GURU) which employs a hedge fund replication strategy based on 13F filings the ETF provider is rolling out two new funds that will pursue a similar strategy in other segments of the equity market.
ETF investors will want to pay attention to the new funds following GURU's success so far. Since its inception almost two years GURU is up 62% compared to 46% for the S&P 500. The obvious knock on the strategy is that the funds invest based on stale data from SEC filings that may not represent the actual holdings by the time the 13F filings have been made public.
Proponents of this form of hedge fund replication would say the time lag is irrelevant and not only do GURU's result back that up so too do the results from the AlphaClone Alternative Alpha ETF (ALFA) which is up the same 62% since its inception a week before GURU and also manages a hedge fund replication strategy.
The Global X GURU International Index ETF (GURI) will equal weight the 50 'highest conviction' picks as disclosed through quarterly filings with the SEC of foreign stocks that trade in the U.S. For example Suncor Energy is based in Canada as is its primary equity listing but it also has shares traded on the NYSE under symbol (SU) and GURI owns the U.S. listed shares.
Currently GURI's largest country weight is in Canada at 26%, followed by China at 14% and Mexico at 10%. At the sector level GURI favors energy at 22%, technology 20% and consumer discretionary 16%.