The Van Tracker Fund (VTF) tracks the 15-year Van Global Hedge Fund Index. This index tracks approximately 1,200 funds, while the VTF will comprise of a minimum of 60 funds. In Asia the product will be available though Van's joint venture partners in Australia and Singapore.
The fund will launch with a minimum of US$60 million and Van expects no capacity issues through the first US$2 billion.
"We are very excited about the VTF. The year 2002 was spent building it. In 2003, we plan to build worldwide distribution for it and are interested in exploring its use with potential distributors, institutional investors and other potential users, including producers of index derivative products," George Van, chairman, states.
"We believe the VTF represents the ideal hedge fund investment product for institutions, individuals and funds of funds," he adds. "Because it can be shown to represent the hedge fund universe, institutions such as pension funds, foundations and endowments can choose to use it as their core hedge fund product. Our goal is to have it provide performance, over time, equivalent to that of the hedge fund universe. This performance has been excellent over the last 15 years.”
Van believes the product will be of interest to both institutions that have not yet invested in hedge funds and to those already familiar with the asset class. Those institutions new to hedge funds gain the comfort of broad diversification of strategies and funds. This also will appeal to qualified individual investors, Van says. The product allows the more experienced investor to vary the weighting towards each of the 18 constituent strategies.
"We believe this product offers numerous attractive features not currently available in similar offerings now on the market," says George Van.
The 18 strategies and sub-strategies tracked include: aggressive growth, distressed securities, emerging markets, income, macro, market neutral arbitrage, merger arbitrage, fixed income arbitrage, statistical arbitrage, convertible arbitrage, capital structure arbitrage, market neutral securities hedging, market timing, opportunistic, several strategies, short selling, special situations and value.
Construction of the VTF has involved VAN Research staff, academic assistance and input from the investment community including representatives of both the institutional not-for-profit and for-profit sectors.