You soon may be able to access the returns of the hedge fund universe without having to make a massive investment and attest to your assets—and, believe it or not, the proposed vehicle is an index fund.

Goldman Sachs has filed papers with the Securities and Exchange Commission (SEC) for a fund designed to mimic the returns of hedge funds writ large. (You can read the prospectus for the Goldman Sachs Absolute Return Tracker Fund here.)

The Goldman Sachs Absolute Return Tracker Index (GS-ART) is one of the first of a new class of "hedge fund replication" strategies to be developed over the past few years. These products are designed to mimic the returns and performance characteristics of hedge fund indexes—without investing in hedge funds at all.

The GS-ART fund, for instance, uses futures, swaps, commodity structured notes, ETFs and fixed-income securities to replicate the performance of a broad-based hedge fund index created by Goldman Sachs. The fund can go long and short on different assets as needed, and the strategy is rebalanced monthly. Basically, the fund seeks exposure to the components of the GS-ART through these other investment vehicles in correlation to the components' representation in the index.

The prospectus says that some index information and data about components and their relative weightings will be shared with the fund manager for the sake of the fund's management, but that the index will not be completely transparent. The fund manager and shareholders, for example, will not necessarily know how the index's components vary over time. Although this lack of transparency is anathema to the average index investor, one gets the feeling that they are not the target group for this fund.

The fund simply approximates the index's returns, which it can do through investments in vehicles such as futures, swaps, commodity structured notes, ETFs and fixed-income securities. Since components can receive negative weightings in the index, the fund manager will use short strategies with regard to instruments providing exposure to such components.

In reality, it's a bit of a misnomer to call this an index fund. The index cannot be replicated by the fund manager in any traditional sense, and the lack of transparency means that sometimes the fund manager might simply be forced to guess at what he thinks is going on in the underlying index. Moreover, while the latitude given to the manager with regard to achieving the index's returns is somewhat in keeping with the spirit of hedge fund investment, it is a bit extreme by the standards of index fund investors. And it remains to be seen how closely the fund will track its index.

Unfortunately for investors, the fees associated with the fund so far look like they will be more hedge fund than index fund. Class A shares of the fund will have the potential of a 5.5% load and 12b-1 fees of 0.25%. Class C shares, meanwhile, could be charged a 1% deferred load and 12b-1 fees 1.00%. No information was provided regarding management fees, but it looks like both A and C shares could be charged redemption fees of 2.00%.

There are other groups out there working on similar strategies as well. IndexIQ, for instance, is in the process of launching its HedgeIQ lineup of replicated hedge fund strategies. The HedgeIQ strategies will actually focus on individual hedge fund strategies, such as fixed-income arbitrage, emerging markets, etc.; in contrast, the Goldman product looks at hedge funds as a whole asset class, lumping everything together into one bucket.

Will these new strategies be a hit? It remains to be seen. While hedge funds and index funds seem far apart, there is clearly demand for hedge fund returns, as evidenced by the billions and billions of dollars that are flowing into hedge funds and the willingness of investors to pay huge fees to fit into the hedge fund space. Capturing similar returns at a lower cost with some of the benefits of indexing (including less risk that your hedge fund will "implode") ... well, that could be interesting to some.