How Hedge Funds Are Positioning in ETFs

The video discusses the increasing use of ETFs by hedge funds, highlighting their unique positioning strategies. Hedge funds often use ETFs for risk-adjusted returns rather than total returns, with a significant portion of ETF short positions attributed to them. Leading hedge funds like Bridgewater and Citadel are major players in this space. The video also covers popular ETFs among hedge funds, noting a trend towards smaller, less liquid funds to save on costs.

What is the unique approach hedge funds take when using ETFs?

• They avoid using ETFs altogether.

• They focus solely on long positions.

• They consider gross positioning, including net short positions.

• They only invest in ETFs with high dividends.

Which hedge fund is noted as the biggest user of ETFs on the long side?

• Bridgewater

• OGS

• Goldman Sachs

• Citadel

What strategy do hedge funds like OGS use with ETFs?

• They avoid ETFs to minimize risk.

• They hold one or two large, liquid funds for liquidity management.

• They only invest in ETFs with high growth potential.

• They invest in a wide range of small ETFs.

What is a recent trend among hedge funds regarding ETF selection?

• Opting for smaller, less liquid funds to reduce costs.

• Choosing only the most liquid ETFs.

• Avoiding ETFs due to high fees.

• Investing exclusively in technology sector ETFs.

Which ETF recently entered the top five for hedge fund usage despite lower liquidity?

• IVV

• KZM

• SPY

• QQQ