Let's start with a fun fact: Quebec has the world's highest density of credit union membership. Now, with that in mind...
Desjardin, the $300B Quebecois credit union, is listing a market neutral ETF in Toronto. The Desjardins Alt Long/Short Equity Market Neutral ETF (DANC) will be actively managed and seek to provide positive returns regardless of how well (or badly) the market is doing.
To achieve this, the fund selects pairs of correlated assets typically in the same sector, and goes long on one thought likely to outperform, and short on one thought likely to underperform.
The targeted size of each individual pair is between 1% and 5% of the ETF's NAV. International exposures are capped at 25% of NAV.
The fund will also undertake hedge fund style arbitrage trades, including special situation (i.e. corporate events), statistical (i.e. mean reversion) and capital structure arbitrage.
The fund charges 1% a year.
