Unlimited expanded its ETF suite today with the launch of the Unlimited HFGM Global Macro ETF (HFGM). The fund offers an actively managed, global macro hedge fund approach to investing across a range of asset classes.
HFGM seeks to capture mispricing within global markets. The fund takes long and short positions across equities, fixed income, currency, credit, and exchange rate markets. Bob Elliott, CEO and CIO of Unlimited, brings more than two decades of systematic global macro investing experience to bear when managing the fund. He previously served as an investment committee member at Bridgewater Associates before co-founding Unlimited.
“Our global macro ETF was designed to offer a volatility target aligned with equity markets as an investor-friendly way to add the diversification features of alts to a balanced portfolio,” Elliott said in the press release.
The fund uses a proprietary, data-driven approach that seeks to identify hedge fund global macro managers’ current positions. It then replicates the positions in its portfolio, investing in long and short positions in futures contracts and a basket of ETFs. HFGM offers similar returns to the hedge fund global macro sector with twice the volatility of the sector, a strategy that may yield outperformance.
HFGM teases out the global macro segment of the firm’s Unlimited HFND Multi-Strategy Return Tracker ETF (HFND ), which captures a range of hedge fund strategies within a single fund. It’s the first in a series of launches coming later this year that will offer targeted exposure to specific hedge fund strategies currently found within HFND.
Global Macro a Notable Portfolio Diversifier
Global macro hedge fund strategies generally maintain low correlations to stocks and bonds. What’s more, managers of these funds tend to create relatively consistent alpha, according to Unlimited. However, hedge funds often carry steep entry fees and even steeper management fees (2/20 fee model). By harnessing this hedge fund strategy in an ETF wrapper using replication, HFGM broadens access to a greater range of investors. It also provides transparency and liquidity for investors.
“Financial advisors and Institutional investors facing turbulent markets are looking for ways to diversify their portfolios, but many find the high fees, lack of liquidity and adverse tax treatment associated with traditional alts offerings untenable,” noted Elliott in the press release.
HFGM’s potential for low correlation to stocks and bonds make it an attractive diversifier in 2025 markets. Because the strategy seeks mispricing opportunities across geographies and asset classes, it generally creates alpha that isn’t reliant on the movement of U.S. stocks and bonds. HFGM may prove an appealing addition to portfolios while U.S. markets remain rife with uncertainty.
HFGM has a management fee of 1.00%.
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