NEW YORK, October 11, 2022 (GLOBE NEWSWIRE) — Bob Elliott, former member of the Investment Committee at Bridgewater Associates, today announced the launch of Unlimited, a new investment firm purpose-built to give all investors exposure to the alpha-generating potential of alternative investment strategies without the high fees and adverse tax implications. In conjunction with the launch, the firm announced its first product, the Unlimited HFND Multi-Strategy Return Tracker ETF (NYSE: “HFND”), which uses a sophisticated machine learning engine to track the gross-of-fees returns across several hedge fund indices.
Mr. Elliott is the CEO and Chief Investment Officer of Unlimited. He has built innovative hedge fund strategies for more than two decades, most recently as a member of the Investment Committee at Bridgewater Associates, where he developed strategies across asset classes, including many for the firm’s flagship Pure Alpha fund. He is joined by Bruce McNevin, Co-founder and Chief Data Scientist at Unlimited. Mr. McNevin is a Professor of Economics at New York University and has held various data science positions at hedge funds Clinton Group and Midway Group, along with positions at Bank of America and BlackRock.
“After spending many years in the hedge fund industry, we’ve identified that investors are either ill served by exorbitant fees in the asset class or are unable to access such exclusive strategies,” said Mr. Elliott. “With HFND, we are bridging what we see as a crucial gap in the market by bringing together the best parts of the hedge fund industry with the democratizing structure of an ETF. Ultimately, we believe every investor should have access to institutional quality return potential.”
Investors facing a period of high volatility and uncertainty are increasingly looking for investments that will diversify their portfolios to help weather varied market conditions. Hedge fund strategies have historically generated significant alpha, or returns above the relevant benchmark, but that alpha is typically eaten away by high fees and inefficient tax structures. Unlimited believes HFND is built to mitigate those costs, bringing a more sophisticated approach to hedge fund replication than has been employed in an ETF to date.
Prior to HFND’s launch, hedge fund-mimicking ETFs have relied upon public lings, which have proven to be too delayed or misleading to accurately mirror investment positioning. Other funds offer only single hedge fund-style strategies that often experience extended periods of underperformance. Unlimited has instead built an ensemble of machine learning algorithms that analyze real-time investment returns of a diversified set of hedge fund styles. HFND will allocate toward a basket of ETFs and exchange-listed futures contracts to replicate the returns of those underlying hedge funds.
HFND is an actively managed ETF that will typically hold long and short positions in 30-50 ETFs and exchange-listed futures contracts across asset classes. It will have management fees that are roughly one-quarter of the standard 2 and 20 cost of a typical hedge fund. The strategy will be managed by Mr. Elliott and Mr. McNevin.
About Bob Elliot
Bob Elliott is a Co-founder, Chief Executive Officer and Chief Investment Officer at Unlimited. He has built innovative investment strategies for over two decades, most recently as a member of the Investment Committee at Bridgewater Associates, LP, the world’s largest hedge fund. Mr. Elliott worked at Bridgewater from 2005 to 2018, where he created investment strategies across equities, fixed income, credit, exchange rates, and commodities, including many used in the flagship Pure Alpha fund. In his role on the Investment Committee there, he was responsible for overseeing Pure Alpha’s foreign exchange, sovereign credit, and emerging markets portfolios. Before that, he built and led Ray Dalio’s personal investment research team at Bridgewater for 10 years. Mr. Elliott was also the author of hundreds of Bridgewater’s widely read Daily Observations and directly counseled the Treasury, the Federal Reserve and the White House during the Global Financial Crisis in 2008. He holds a BA in History and Science from Harvard University.
About Bruce McNevin
Bruce McNevin is a Co-founder and Chief Data Scientist at Unlimited. He is an economist with 35 years of experience specializing in econometric modeling and forecasting. From 2016 to 2022, he was a Director in the Quantitative Strategy Group at Bank of America where his primary responsibility was the development of models for pricing of mortgage-backed securities. He was with Bank of America for ve years and prior to that, he worked for 12 years at a hedge fund as the managing director of Mortgage Research. For the past 16 years, Mr. McNevin has been an Adjunct Professor in the Economics Department of New York University where he teaches master’s level courses in Financial Econometrics and Bayesian Econometrics. He is maintaining an active research agenda outside of his normal work responsibilities and has recently published several papers on the use of wavelets for estimating the capital asset pricing model (CAPM) beta. Mr. McNevin holds a PhD in Economics from the C.U.N.Y Graduate Center.
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Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus. A prospectus may be obtained by clicking here. Please read the prospectus carefully before you invest.
As with all ETFs, Fund shares may be bought and sold in the secondary market at market prices. The market price normally should approximate the Fund’s net asset value per share (NAV), but the market price sometimes may be higher or lower than the NAV. There are a limited number of financial institutions authorized to buy and sell shares directly with the Fund; and there may be a limited number of other liquidity providers in the marketplace. There is no assurance that Fund shares will trade at any volume, or at all, on any stock exchange. Low trading activity may result in shares trading at a material discount to NAV.
Investments involve risk. Principal loss is possible.
Underlying ETFs Risks. The Fund will incur higher and duplicative expenses because it invests in Underlying ETFs. There is also the risk that the Fund may suffer losses due to the investment practices of the Underlying ETFs. The Fund will be subject to substantially the same risks as those associated with the direct ownership of securities held by the Underlying ETFs. Additionally, Underlying ETFs are also subject to the “ETF Risks” described above.
Derivatives Risk. The Fund’s or an Underlying ETF’s derivative investments have risks, including the imperfect correlation between the value of such instruments and the underlying assets or index; the loss of principal, including the potential loss of amounts greater than the initial amount invested in the derivative instrument; the possible default of the other party to the transaction; and illiquidity of the derivative investments.
Fixed Income Securities Risk. The Fund may invest in Underlying ETFs that invest in fixed income securities. The prices of fixed income securities may be affected by changes in interest rates, the creditworthiness and financial strength of the issuer and other factors. An increase in prevailing interest rates typically causes the value of existing fixed income securities to fall and often has a greater impact on longer-duration and/or higher quality fixed income securities.
Foreign Securities Risk. Foreign securities held by Underlying ETFs in which the Fund invests involve certain risks not involved in domestic investments and may experience more rapid and extreme changes in value than investments in securities of U.S. companies. Financial markets in foreign countries often are not as developed, efficient or liquid as financial markets in the United States, and therefore, the prices of non-U.S. securities can be more volatile.
Short Selling Risk. The Fund may make short sales of securities of Underlying ETFs, which involves selling a security it does not own in anticipation that the price of the security will decline. Short sales may involve substantial risk and leverage. Short sales expose the Fund to the risk that it will be required to buy (“cover”) the security sold short when the security has appreciated in value or is unavailable, thus resulting in a loss to the Fund. Short sales also involve the risk that losses may exceed the amount invested and may be unlimited.
Futures Contracts Risk. The Fund or Underlying ETFs may invest in futures contracts. Risks of futures contracts include: (i) an imperfect correlation between the value of the futures contract and the underlying asset; (ii) possible lack of a liquid secondary market; (iii) the inability to close a futures contract when desired; (iv) losses caused by unanticipated market movements, which may be unlimited; (v) an obligation for the Fund or an Underlying ETF, as applicable, to make daily cash payments to maintain its required margin, particularly at times when the Fund or Underlying ETF may have insufficient cash; and (vi) unfavorable execution prices from rapid selling.
Swap Agreement Risk. The Fund or an Underlying ETF may invest in swap agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period, which may range from one day to more than six months. The swap agreements in which the Fund or an Underlying ETF, as applicable, invests are generally traded in the over-the counter market, which generally has less transparency than exchange-traded derivatives instruments.
New Fund Risk. The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions.
Definitions:
Alpha: A term used in investing to describe an investment strategy’s ability to beat the market.
Beta: A concept that measures the expected move in a stock relative to movements in the
overall market.
The fund is distributed by Foreside Fund Services, LLC
Launch & Structure Partner: Tidal ETF Services