ETF issuer db x-trackers reported earlier this week that its hedge fund ETF had reached US$1 billion in assets under management.

The db x-trackers db hedge fund index ETF replicates hedge fund performance by investing in a group of funds operating on Deutsche Bank’s managed account platform.

The ETF charges 0.90% per annum in management fees and is listed in the UK, Germany and Switzerland.

The index tracked by the ETF consists of five sub-indices, each tracking a different sector of the hedge fund universe. The percentage weightings allocated to these sub-indices reflect the predominance of each hedge fund strategy group in worldwide hedge fund assets under management, as measured by Hedge Funds Research (HFR). This results in nearly 80% of the ETF's assets being devoted to the "equity hedge" and "event-driven" categories, as can be seen from the table below.

The return of these two sub-index categories in the year to date is just under 10%. When combined with close to a 30% return from the credit and convertible index category (which carries a 9.5% weighting) and a -5.35% return from the systematic macro category (which carries a 10.8% weighting), the overall hedge fund index is up by 8.96% in the year to date.

db x-trackers’ hedge fund ETF, which was launched on 16 January, has seen a 7.8% rise in its NAV (as of 17 December 2009).

32 hedge funds are listed as “selected underlying trading advisors” in the index. Their names are given on the fund factsheet.

Indexuniverse.eu described the hedge fund ETF in greater detail in a feature written earlier this year, available here.