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New ETFs attempt to mimic the portfolios of private equity

Carolina Wilson &  Sarah Ponczek
Carolina Wilson & Sarah Ponczek12/11/2017 08:00 AM GMT+08  • 3 min read
New ETFs attempt to mimic the portfolios of private equity
SINGAPORE (Dec 11): Exchange-traded funds (ETFs) are not always the simple index funds people think they are. Sometimes, they behave like hedge funds. Now, a Northern California investment manager wants to turn them into private-­equity portfolios.
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SINGAPORE (Dec 11): Exchange-traded funds (ETFs) are not always the simple index funds people think they are. Sometimes, they behave like hedge funds. Now, a Northern California investment manager wants to turn them into private-­equity portfolios.

USCF Advisers of Oakland, California is readying two ETFs that use a theory devised by a Harvard professor in an attempt to mimic the outsized returns typically reserved for private-equity investors, according to a filing.

The USCF SummerHaven SHPEI Index ETF, which will go by the symbol “BUY”, and the USCF SummerHaven SHPEN Index Fund, ticker “BUYN”, will pick companies that trade “cheaply” relative to the market, making them likely targets for private-equity takeovers. BUY will equal-weight US companies with market capitalisations between US$100 million ($135 million) and US$10 billion, while BUYN will invest exclusively in natural resources firms.

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