A Big Critic of ETFs Is Planning to Launch One of His Own

(Bloomberg) Like many active managers, Mark Yusko of Morgan Creek Capital Management LLC has some serious gripes about the rise of exchange-traded funds and the ascendancy of passive investing. And like many of those managers, he’s also starting his own ETF to cash in on their popularity — but with a twist. Yusko, whose firm invests around 80 percent of its $2.5 billion in hedge funds, has major problems with rules-based ETFs. Possessing “no ability to think,” they blindly buy assets regardless of price, hurting investors, Yusko said. Among the chief offenders are minimum volatility ETFs, which he called “one of the worst things ever created.” What’s more, as central banks ease up on monetary stimulus, “hedge funds are going to win” against passive investing styles, he said.

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