Bob Elliott, former member of the Investment Committee at
Bridgewater Associates, today announced the launch of Unlimited, a
new investment firm purpose-built to give all investors exposure to
the alpha-generating potential of alternative investment strategies
without the high fees and adverse tax implications. In conjunction
with the launch, the firm announced its first product, the
Unlimited HFND Multi-Strategy Return Tracker ETF (NYSE: “HFND”),
which uses a sophisticated machine learning engine to track the
gross-of-fees returns across several hedge fund indices.
Mr. Elliott is the CEO and Chief Investment Officer of
Unlimited. He has built innovative hedge fund strategies for more
than two decades, most recently as a member of the Investment
Committee at Bridgewater Associates, where he developed strategies
across asset classes, including many for the firm’s flagship Pure
Alpha fund. He is joined by Bruce McNevin, Co-founder and Chief
Data Scientist at Unlimited. Mr. McNevin is a Professor of
Economics at New York University and has held various data science
positions at hedge funds Clinton Group and Midway Group, along with
positions at Bank of America and BlackRock.
“After spending many years in the hedge fund industry, we’ve
identified that investors are either ill-served by exorbitant fees
in the asset class or are unable to access such exclusive
strategies,” said Mr. Elliott. “With HFND, we are bridging what we
see as a crucial gap in the market by bringing together the best
parts of the hedge fund industry with the democratizing structure
of an ETF. Ultimately, we believe every investor should have access
to institutional quality return potential.”
Investors facing a period of high volatility and uncertainty are
increasingly looking for investments that will diversify their
portfolios to help weather varied market conditions. Hedge fund
strategies have historically generated significant alpha, or
returns above the relevant benchmark, but that alpha is typically
eaten away by high fees and inefficient tax structures. Unlimited
believes HFND is built to mitigate those costs, bringing a more
sophisticated approach to hedge fund replication than has been
employed in an ETF to date.
Prior to HFND’s launch, hedge fund-mimicking ETFs have relied
upon public filings, which have proven to be too delayed or
misleading to accurately mirror investment positioning. Other funds
offer only single hedge fund-style strategies that often experience
extended periods of underperformance. Unlimited has instead built
an ensemble of machine learning algorithms that analyze real-time
investment returns of a diversified set of hedge fund styles. HFND
will allocate toward a basket of ETFs and exchange-listed futures
contracts to replicate the returns of those underlying hedge
funds.
HFND is an actively managed ETF that will typically hold long
and short positions in 30-50 ETFs and exchange-listed futures
contracts across asset classes. It will have management fees that
are roughly one-quarter of the standard 2 and 20 cost of a typical
hedge fund. The strategy will be managed by Mr. Elliott and Mr.
McNevin.
About Bob ElliottBob Elliott is a Co-founder,
Chief Executive Officer and Chief Investment Officer at Unlimited.
He has built innovative investment strategies for over two decades,
most recently as a member of the Investment Committee at
Bridgewater Associates, LP, the world’s largest hedge fund. Mr.
Elliott worked at Bridgewater from 2005 to 2018, where he created
investment strategies across equities, fixed income, credit,
exchange rates, and commodities, including many used in the
flagship Pure Alpha fund. In his role on the Investment Committee
there, he was responsible for overseeing Pure Alpha’s foreign
exchange, sovereign credit, and emerging markets portfolios. Before
that, he built and led Ray Dalio’s personal investment research
team at Bridgewater for 10 years. Mr. Elliott was also the author
of hundreds of Bridgewater’s widely read Daily Observations and
directly counseled the Treasury, the Federal Reserve and the White
House during the Global Financial Crisis in 2008. He holds a BA in
History and Science from Harvard University.
About Bruce McNevin Bruce McNevin is a
Co-founder and Chief Data Scientist at Unlimited. He is an
economist with 35 years of experience specializing in econometric
modeling and forecasting. From 2016 to 2022, he was a Director in
the Quantitative Strategy Group at Bank of America where his
primary responsibility was the development of models for pricing of
mortgage-backed securities. He was with Bank of America for five
years and prior to that, he worked for 12 years at a hedge fund as
the managing director of Mortgage Research. For the past 16 years,
Mr. McNevin has been an Adjunct Professor in the Economics
Department of New York University where he teaches master’s level
courses in Financial Econometrics and Bayesian Econometrics. He is
maintaining an active research agenda outside of his normal work
responsibilities and has recently published several papers on the
use of wavelets for estimating the capital asset pricing model
(CAPM) beta. Mr. McNevin holds a PhD in Economics from the C.U.N.Y
Graduate Center.
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Before investing you should carefully consider the Fund’s
investment objectives, risks, charges and expenses. This and other
information is in the prospectus. A prospectus may be obtained by
clicking here. Please read the prospectus carefully before you
invest.
As with all ETFs, Fund shares may be bought and sold in the
secondary market at market prices. The market price normally should
approximate the Fund’s net asset value per share (NAV), but the
market price sometimes may be higher or lower than the NAV. There
are a limited number of financial institutions authorized to buy
and sell shares directly with the Fund; and there may be a limited
number of other liquidity providers in the marketplace. There is no
assurance that Fund shares will trade at any volume, or at all, on
any stock exchange. Low trading activity may result in shares
trading at a material discount to NAV.
Investments involve risk. Principal loss is possible
Underlying ETFs Risks. The Fund will incur higher and
duplicative expenses because it invests in Underlying ETFs. There
is also the risk that the Fund may suffer losses due to the
investment practices of the Underlying ETFs. The Fund will be
subject to substantially the same risks as those associated with
the direct ownership of securities held by the Underlying ETFs.
Additionally, Underlying ETFs are also subject to the “ETF Risks”
described above.
Derivatives Risk. The Fund’s or an Underlying ETF’s derivative
investments have risks, including the imperfect correlation between
the value of such instruments and the underlying assets or index;
the loss of principal, including the potential loss of amounts
greater than the initial amount invested in the derivative
instrument; the possible default of the other party to the
transaction; and illiquidity of the derivative investments.
Fixed Income Securities Risk. The Fund may invest in Underlying
ETFs that invest in fixed income securities. The prices of fixed
income securities may be affected by changes in interest rates, the
creditworthiness and financial strength of the issuer and other
factors. An increase in prevailing interest rates typically causes
the value of existing fixed income securities to fall and often has
a greater impact on longer-duration and/or higher quality fixed
income securities.
Foreign Securities Risk. Foreign securities held by Underlying
ETFs in which the Fund invests involve certain risks not involved
in domestic investments and may experience more rapid and extreme
changes in value than investments in securities of U.S. companies.
Financial markets in foreign countries often are not as developed,
efficient or liquid as financial markets in the United States, and
therefore, the prices of non-U.S. securities can be more
volatile.
Short Selling Risk. The Fund may make short sales of securities
of Underlying ETFs, which involves selling a security it does not
own in anticipation that the price of the security will decline.
Short sales may involve substantial risk and leverage. Short sales
expose the Fund to the risk that it will be required to buy
(“cover”) the security sold short when the security has appreciated
in value or is unavailable, thus resulting in a loss to the Fund.
Short sales also involve the risk that losses may exceed the amount
invested and may be unlimited.
Futures Contracts Risk. The Fund or Underlying ETFs may invest
in futures contracts. Risks of futures contracts include: (i) an
imperfect correlation between the value of the futures contract and
the underlying asset; (ii) possible lack of a liquid secondary
market; (iii) the inability to close a futures contract when
desired; (iv) losses caused by unanticipated market movements,
which may be unlimited; (v) an obligation for the Fund or an
Underlying ETF, as applicable, to make daily cash payments to
maintain its required margin, particularly at times when the Fund
or Underlying ETF may have insufficient cash; and (vi) unfavorable
execution prices from rapid selling.
Swap Agreement Risk. The Fund or an Underlying ETF may invest in
swap agreements. Swap agreements are entered into primarily with
major global financial institutions for a specified period, which
may range from one day to more than six months. The swap agreements
in which the Fund or an Underlying ETF, as applicable, invests are
generally traded in the over-the-counter market, which generally
has less transparency than exchange-traded derivatives
instruments.
New Fund Risk. The Fund is a recently organized management
investment company with no operating history. As a result,
prospective investors do not have a track record or history on
which to base their investment decisions.
The fund is distributed by Foreside Fund Services, LLCLaunch
& Structure Partner: Tidal ETF Services
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