Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Portfolio > Alternative Investments > Hedge Funds

Dreyfus Fund Offers Wide Hedge Fund Exposures

Your article was successfully shared with the contacts you provided.

The Dreyfus Corp, part of BNY Mellon Asset Management, has just launched the Dreyfus Dynamic Alternatives Fund, a mutual fund designed to provide investors with exposure to a broad range of hedge fund returns within the transparent, relatively low cost and liquid structure of a mutual fund.

According to Dreyfus, the fund seeks total return that approximates or exceeds that of a diversified portfolio of hedge funds. To do this, the fund follows a hedge fund beta replication strategy designed to provide investment exposure to a diversified portfolio of hedge funds included in the HFRI Fund Weighted Composite Index, combined with a managed futures replication strategy designed to mitigate downside risks.

The portfolio managers use proprietary statistical models to estimate the market exposures (or betas) that drive the aggregate returns of the hedge funds and certain managed futures included in the HFRI Index, and then implement a strategy that relies extensively on derivative instruments in seeking to replicate those exposures. To determine the allocation of fund assets between the hedge fund beta replication strategy and managed futures replication strategy, the portfolio managers use a proprietary macro risk allocation model.

The fund does not make direct investments in hedge funds, Dreyfus said in a statement. Mellon Capital Management Corp, an affiliate of Dreyfus, subadvises the fund.

Michael S. Fischer ([email protected]) is a New York-based financial writer and editor and a frequent contributor to Wealth Manager.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.