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How Hedge Funds Use ETFs And Why

In the last two years assets in exchange-traded funds has surpassed that held in hedge funds. This year the gap widened between them to $1trillion. Rising pressure on fees and returns has seen a number of hedge fund managers turn to ETFs. Hedge funds have had a bumpy ride since 2009. In 2014 several high profile pension funds, such as Britain’s Local Pension Fund Authority, PMT and CalPERS switched their hedge funds for other cheaper, liquid products that mimic hedge fund strategies. Then last year saw hedge funds lose some $1bn. The year has been better and hedge fund assets hit a...