AlphaMetrix's New Fund Will Enable Investors To Complement Portfolios With 'Liquid Alpha'

AlphaMetrix, LLC introduces a new fund designed to track the performance of Newedge's widely followed AlternativeEdgeSM Short Term Traders Index (STTI). The STTI tracker fund, available via the AlphaMetrix Managed Account platform, is meant to offer pensions, endowments and accredited

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AlphaMetrix, LLC introduces a new fund designed to track the performance of Newedge’s widely followed AlternativeEdgeSM Short-Term Traders Index (STTI).

The STTI tracker fund, available via the AlphaMetrix Managed Account platform, is meant to offer pensions, endowments and accredited investors a low-cost, efficient way to invest in “liquid alpha” strategies managed by a diverse portfolio of commodity trading advisors (CTAs).

The AlphaMetrix STTI tracker fund, which launched in mid-December 2008, currently has approximately $70 million under management, with additional commitments from large institutional investors expected in the coming months. In January 2009, its first full month, the fund was up 1.94% (past performance is not indicative of future results).

To be in the AlphaMetrix STTI tracker fund, CTAs must meet the same profile as those in the Newedge index, namely:

– Program must have an average holding period of less than ten days,

Program must be diversified and futures must be their primary investment instrument,

Program must be open for new investment.

The short holding periods offer CTAs in the AlphaMetrix STTI tracker fund a considerable set of trading opportunities allowing them to utilize a broad range of uncorrelated approaches, such as pattern

recognition, momentum and trend-following, mean reversion, global macro, arbitrage and econometric strategies.

“Short-term strategies have little to no correlation to any traditional or alternative investments, making them appealing to investors seeking to add pure ‘liquid alpha’ to their portfolios,” says Aleks Kins, CEO, AlphaMetrix. “Further, the Short-Term Traders Index includes a wide range of diversified trading strategies, with each CTA heavily vetted, highly liquid and completely transparent.”

“The index is a highly practical application of our research into the best ways to construct portfolios,” says Galen Burghardt, head of research, Newedge. “We expect the index to produce results that continue to be uncorrelated to every major asset class and expect the average correlation of returns in the index to remain low. As a result, we expect the index to track returns in this space with very low volatility.”

L.D.

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