Key Takeaways
- • Horizons ETF's Morningstar Hedge Fund Index ETF (HHF) won the 2012 William F. Sharpe Award for Best ETF Innovation, recognizing groundbreaking achievement in ETF development at the Global Indexing & ETFs conference in Phoenix.
- • HHF provides investors with indexed exposure to the Morningstar Broad Hedge Fund Index, which comprises more than 500 constituent hedge funds, delivering what was previously considered impossible: liquid, investable hedge fund index exposure.
- • The ETF employs an innovative hedge fund replication strategy originally developed by Innocap Investment Management and implemented by National Bank of Canada, enabling investors to track hedge fund performance without direct hedge fund ownership.
- • The underlying index captures core hedge fund investment characteristics including absolute returns, portfolio diversification, and lower volatility across a wide variety of trading strategies, while being hedged to the Canadian dollar.
- • Howard Atkinson, CEO of Horizons ETFs, characterized the Sharpe Award as "the Oscars of indexing and ETF investing," positioning this Canadian-made product as a landmark solution in the alternative investment space.
Summary
Horizons ETF has received the 2012 William F. Sharpe Award for Best ETF Innovation for its Morningstar Hedge Fund Index ETF (HHF), marking a significant milestone in the evolution of indexed alternative investment products. The award was presented at the Global Indexing & ETFs conference held in Phoenix, Arizona, and recognizes exceptional innovation in ETF development.
The HHF ETF provides investors with exposure to the Morningstar Broad Hedge Fund Index, a comprehensive index containing more than 500 constituent hedge funds. The product addresses a longstanding challenge in alternative asset management by offering liquid, investable access to hedge fund returns—an objective that industry participants had previously deemed unattainable. The ETF seeks to replicate the performance of the index before fees and expenses, with returns hedged to the Canadian dollar.
The Morningstar Broad Hedge Fund Index itself is a broad-based benchmark designed to capture the performance and behavior of highly liquid hedge funds across a diverse range of core and category trading strategies. While the index itself is not directly investable, HHF achieves index replication through an innovative hedge fund replication strategy. This methodology was initially developed by Innocap Investment Management and subsequently implemented by National Bank of Canada, enabling the ETF to deliver similar exposure to hedge fund returns without requiring direct investment in the underlying hedge funds.
According to Horizons ETF CEO Howard Atkinson, the index captures the most critical dimensions of hedge fund investing: absolute returns, portfolio diversification, and lower volatility. Atkinson emphasized that the Sharpe Award—named after Nobel laureate William F. Sharpe—represents the highest recognition in the indexing industry, and that achieving this recognition for a Canadian-developed product signals the emergence of a breakthrough alternative investment solution that expands institutional and retail investor access to hedge fund exposure through a regulated, transparent ETF wrapper.
The HHF ETF provides investors with exposure to the Morningstar Broad Hedge Fund Index, a comprehensive index containing more than 500 constituent hedge funds. The product addresses a longstanding challenge in alternative asset management by offering liquid, investable access to hedge fund returns—an objective that industry participants had previously deemed unattainable. The ETF seeks to replicate the performance of the index before fees and expenses, with returns hedged to the Canadian dollar.
The Morningstar Broad Hedge Fund Index itself is a broad-based benchmark designed to capture the performance and behavior of highly liquid hedge funds across a diverse range of core and category trading strategies. While the index itself is not directly investable, HHF achieves index replication through an innovative hedge fund replication strategy. This methodology was initially developed by Innocap Investment Management and subsequently implemented by National Bank of Canada, enabling the ETF to deliver similar exposure to hedge fund returns without requiring direct investment in the underlying hedge funds.
According to Horizons ETF CEO Howard Atkinson, the index captures the most critical dimensions of hedge fund investing: absolute returns, portfolio diversification, and lower volatility. Atkinson emphasized that the Sharpe Award—named after Nobel laureate William F. Sharpe—represents the highest recognition in the indexing industry, and that achieving this recognition for a Canadian-developed product signals the emergence of a breakthrough alternative investment solution that expands institutional and retail investor access to hedge fund exposure through a regulated, transparent ETF wrapper.
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