Latest news with #Akins
CNBC
22-07-2025
- Business
- CNBC
Hedge funds are operating inside ETFs, with some big risks and potential benefits for investors
It's not exactly a new trend, but more hedge fund-like strategies continue to be launched as ETFs, promising investors returns uncorrelated to traditional stock and bond market indexes. For investors, the key is understanding the exact investing style of each (that can vary widely under a general "hedge fund" brand); how its differs from traditional stock and bond investments; how much it charges in fees, and whether there are equally good, and cheaper ways, to seek diversification in the market over the long-term. Historically, hedge fund strategies were limited to the ultrawealthy and institutional investors who could meet high investment minimums, but that has changed. There is now over $5 billion in assets under management in ETFs using some form of hedging and aiming for uncorrelated, diversified returns, according to data. These products are often classified as alternative absolute return strategies, offering investors an alternative to the stock or bond performance tracking the big market benchmarks, such as the S&P 500 Index and Bloomberg Aggregate Bond Index . Hedge fund ETFs can range from event-driven strategies, to multi-strategy portfolios and managed futures funds. The newest are from the Unlimited lineup up ETFs, founded by a former investment committee member at the world's biggest hedge fund, Bridgewater Associates. It recently launched global macro, long-short and managed futures strategies, all charging 0.95%. While no comparison can be made between what these funds are trying to do and the goal of an S&P 500 index fund like Vanguard's VOO , investors do pay a lot more for the access to alternative investment strategies. Vanguard's S&P 500 ETF has an expense ratio of 0.03%. Mike Akins, CEO of ETF Action, says that these strategies can be unique, and useful. "The idea of most of these strategies is you're going to get uncorrelated, diversified returns. So, you can get an absolute return strategy that's supposed to perform in all market cycles," he said. "You're creating kind of a diversification tool within your overall portfolio, the opportunity to generate solid returns, but in an uncorrelated fashion to your traditional equity and bond markets," he added. Funds that track major market benchmarks such as the Russell 1000 or S&P 500 should all have very similar performance, so choosing one of these ETFs versus another across all of the ETF managers that offer versions of them won't influence performance much, if at all. But with managed futures, event-driven or multi-strategy funds, Akins said there can be a huge divergence in returns across funds and over different time periods. He said a review of the recent performance from this category shows that some do produce negative correlations to the broad equity markets, but others purporting to achieve uncorrelated returns have extremely high correlations to major market benchmarks. "All these different strategies, even though they have very similar sounding names, the results and the way they're going about trying to achieve results are very, very different," Akins said. That leads Akins to conclude that in most cases, these kinds of ETFs are better left for professional investors to consider. "Generally speaking, they're probably best used in the hands of a financial professional that understands how they're putting it into a client's portfolio," he said. Strategas senior ETF and technical strategist Todd Sohn says that while the fees are higher than many core ETFs, accessing these strategies within a retail fund wrapper is the only way most investors can gain access to the more sophisticated trades. "Access is a pro, and then you're also getting what should be an uncorrelated strategy to your typical 60/40 stock and bond portfolio," he said. "It'll move in a different direction on a given day. It'll help offset, maybe, any losses." He added that while there are no guarantees it can lead to outperformance versus tradition portfolio structures, "ideally, it acts as a little bit of a push in certain environments." But Akins says that transparency is a factor, as these hedge fund-like structures can be hard for most investors to understand. "They're running very unique strategies. It really does become more of the due diligence of the manager selection process versus just understanding what's being done and held inside of the portfolio like a normal ETF or bond portfolio," Akins said. "The level of due diligence that needs to be done is much higher for this type of strategy," he said. Sohn said the complexities inherent in these funds is a factor that investors need to educate themselves on before including in a broader portfolio mix. "There's a little bit more nuance in them, and they can go long and short, they can play in very different asset classes, like commodities." Sohn said. "So there needs to be a little bit of an education component, and that complexity can sometimes scare people off," he said. Akins said it's fair to consider whether alternatives can take the place of traditional fixed income as a diversifier at a time when investors are concerned about the bond market's ability to serve in its traditional role, say up to 10% to 15% in an alternative bucket. "But if you're going to do that, you really, truly need to understand how it reacts," he said. "Is it truly providing you with uncorrelated returns? Is it making the overall risk in your portfolio decrease? Because if it's not, you're paying a lot," he added. The average expense ratio for the alternative ETF space tracked by is 92 basis points (0.92%), with some portfolios a bit below that but others well above 1%, even 2% in some cases, Akins said. "Unless it's truly delivering uncorrelated returns across the market, it's not worth the extra money," he said. He stressed that this does not mean alternative strategies are like some "Wild West" in the ETF market. "They're defined strategies. They're defined categories. But the way you go about implementing a managed future strategy, or the way you go about implementing a multi-strategy portfolio, putting all those different alts ... event-driven, managed futures, global macro [together], the way you go about doing that is very different for everybody," he said. Managed futures funds, for example, are all over the place in returns year-to-date, with some ETFs in the space up as much as 3% and others in the same category down more than 10%. "There's a reason those things have been kind of isolated to accredited investors or the wealthy," Akins said of the history of the hedge fund industry. It is not just the complexity of the strategies, but the fact that they serve a greater role in protecting existing wealth from market downside than growing wealth. For the average investor looking to grow their wealth over the long-term rather than protected the wealth already accumulated, these strategies often do not make as much sense, Akins said. Broad-based bond ETFs and low-volatility stock ETFs might be enough for most investors as a way to diversify risk over the long term in portfolios. "If I'm a 30-year-old looking to invest in the markets, and I just want I know it's going to be invested in my IRA or my taxable brokerage account for the next 30 years, these are not going to provide a benefit," he said. "For somebody with accumulated wealth, and the most important thing is to create a portfolio that protects the downside, then that's where these types of strategies really start to play a role in a portfolio. But it's not a YOLO [you only live once] type product," he said. Watch the video above to learn more about how hedge funds strategies are being replicated in ETFs. Sign up for our weekly newsletter that goes beyond the livestream, offering a closer look at the trends and figures shaping the ETF market. Disclaimer
USA Today
19-07-2025
- Sport
- USA Today
Former Spartan Jaden Akins posts best scoring performance in NBA Summer League finale
Former Spartans guard Jaden Akins went out on top in his NBA Summer League finale on Friday. Akins wrapped up his stay at the NBA Summer League with his best scoring performance yet on Friday. Akins reached double-digits in scoring for the first time in the five games played, finishing with 11 points, four rebounds and three steals in the loss against the Mavericks. Akins made it clear he was going to go out firing, putting up a team-high 14 shots in the summer league finale. Akins appeared in four of the Orlando Magic's five NBA Summer League games. He finished his stay averaging just under six points per game in his four appearances. We will now have to wait and see where Akins lands for the upcoming season. There is a chance he'll get signed to a NBA G League team, but at a minimum he'll get a shot to play outside of the U.S. should he not land on a G League squad. Contact/Follow us @The SpartansWire on X (formerly Twitter) and like our page on Facebook to follow ongoing coverage of Michigan State news, notes and opinion. You can also follow Robert Bondy on X @RobertBondy5.
USA Today
17-07-2025
- Sport
- USA Today
Former Spartan Jaden Akins impresses during NBA Summer League game on Wednesday
Former Michigan State Spartans guard Jaden Akins had his best performance of the NBA Summer League on Wednesday. Akins appeared in his third NBA Summer League game on Wednesday, dropping his best performance with Spartans head coach Tom Izzo in the house. Akins scored nine points, grabbed three rebounds and dished out one assist in the Orlando Magic's loss against the Brooklyn Nets on Wednesday. Akins was signed by the Magic to their NBA Summer League team, giving him an opportunity to earn a spot in the organization (most likely on their G League team). He went unselected in last month's NBA Draft after a successful four year career at Michigan State. Akins will have one more opportunity to impress the Magic in a consolation game against the Dallas Mavericks on Friday. That game is scheduled to tip off at 4 p.m. ET and will be televised on NBA TV. Contact/Follow us @The SpartansWire on X (formerly Twitter) and like our page on Facebook to follow ongoing coverage of Michigan State news, notes and opinion. You can also follow Robert Bondy on X @RobertBondy5.
USA Today
16-07-2025
- Sport
- USA Today
Former Spartan Jaden Akins scores first career points in NBA Summer League
Former Spartan Jaden Akins has officially scored his first NBA bucket -- well, NBA Summer League bucket, that is. Akins banked in a three-point shot in the Orlando Magic's NBA Summer League game vs. the Oklahoma City Thunder on Tuesday night. Akins finished the game shooting 1-for-3 with his lone points being on that three-pointer made early in the game. Akins played 18 minutes in the loss to the Thunder. As you would expect, Akins was stellar on the defensive end of the floor, recording three steals on Wednesday. Akins has played in two of the Magic's three NBA Summer League games so far this year. He is looking to break through and land on an NBA roster after going undrafted last month. The Magic have one more NBA Summer League scheduled for Wednesday against the Brooklyn Nets. Contact/Follow us @The SpartansWire on X (formerly Twitter) and like our page on Facebook to follow ongoing coverage of Michigan State news, notes and opinion. You can also follow Robert Bondy on X @RobertBondy5.
USA Today
14-07-2025
- Sport
- USA Today
Former Spartan Jaden Akins makes NBA Summer League debut, makes defensive impact
Jaden Aikins causing a turnover as soon as he checks in!! Spartans stay ready. Former Michigan State guard Jaden Akins made his NBA debut on Sunday. After not playing in the Orlando Magic's NBA Summer League opener earlier in the week, Akins saw some game action on Sunday in a narrow loss against the Toronto Raptors. Akins recorded just over four minutes and finished the game with one assist and zero points on 0-for-1 shooting. While Akins didn't have a lasting impact offensively, we did see his defensive ability in his debut. Akins, of course, was known as a standout defender during his Spartans career, and on Sunday he instantly caused a turnover after checking into the game. You can see the highlight clip below -- courtesy of andrewtalkshoops: The Orlando Magic have two more NBA Summer League games left with games on Tuesday and Wednesday. Hopefully, Akins will see some more action in these final two games and can show enough to land a spot on an NBA team's G League roster for the upcoming season. Contact/Follow us @The SpartansWire on X (formerly Twitter) and like our page on Facebook to follow ongoing coverage of Michigan State news, notes and opinion. You can also follow Robert Bondy on X @RobertBondy5.
