BlackRock, the parent company of ETF behemoth iShares and the world’s largest asset manager, filed with the Securities and Exchange Commission today for permission to launch a so-called long-short index fund, a first for the firm.

Long-short funds take simultaneous long and short positions in an attempt to reduce correlation and smooth out returns during market swings. The strategy is the bread and butter of traditional hedge funds, and the ETF community now appears to be embracing it at a time of heightened economic uncertainty.

Last month, for instance, AdvisorShares, the Bethesda, Md.-based boutique ETF sponsor specializing in actively managed funds, launched the Mars Hill Global Relative Value ETF (NYSEArca: GRV), the first long-short ETF to trade in the U.S. The fund collected more than $38 million in its first month, as we wrote in a story titled AdvisorShares, Global X Hauling In Assets.

The new iShares fund described in BlackRock’s filing will track the MSCI USA Barra Earnings Yield Index, a long-short index that reweights the components of the MSCI USA Index based on current and historical earnings data in order to emphasize securities with “earnings momentum.”

The new fund will invest 130 percent of its net assets in long positions in its underlying index’s component securities and expose 30 percent of net assets to short positions. BlackRock, however, reserves the option to invest up to 20 percent of net assets in an array of other vehicles, including derivatives, commodity-linked notes, and cash.

The MSCI USA Index is a market-cap-weighted index designed to measure the performance of equity securities listed on U.S. stock exchanges. As of June 30, the MSCI USA Index had 593 holdings.

BlackRock did not specify a ticker symbol or expense ratio for its proposed fund in the filing.

BlackRock’s Strategy

When asked for comment about the new fund, Christine Hudacko, a spokeswoman at San Francisco-based iShares, said that this filing is in line with BlackRock’s goal of “offering solutions and packaging strategies in an ETF format” for the ever-changing needs of its clients and investors.

Asked whether this passively managed product was a sign of things to come for BlackRock, Hudacko said that in the future, BlackRock “may offer [long-short funds] in any number of forms, including active or tracking an index.

Hudacko acknowledged that the SEC registration process for new funds is a lengthy one, noting that BlackRock wanted to get its foot in the door now in order to be able to offer a long-short fund to its clients when and if it saw fit to do so.