For Hedge Funds ETFs Have Not ‘Arrived’ Yet

May 22, 2011 6:32 am

We spotted this stat today:

“Surprisingly, the ETFs (Exchange Traded Funds) that are popular among individual investors, do not play a major role in the hedge fund group’s fundamental formulation of their investment strategy.

Kostin and his team of analysts, which included Stuart Kaiser, Amanda Schneider, Ben Snider, and Yi Zhang, noted that the hedge funds used ETFs more for hedging than as a “directional vehicle.” ”We estimate that hedge funds hold $125 billion in gross exposure to ETFs, compared with $1.2 trillion of gross exposure to single-stocks,” says Kostin. Some 18% of aggregate short positions, he said, are via the ETFs.”

Statistics Source: Forbes

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