Factor Advisors has launched five leverage exchange-traded funds that hold both a bull and a bear position. The initial FactorShares ETFs combine holdings in the S&P 500 Index, U.S. Treasury bonds, gold, oil and the U.S. dollar.
“As a portfolio manager, I used to become frustrated about being charged twice the transaction fees and double the margin requirements in order to implement spread trades,” said Stuart Rosenthal, chief executive officer and co-founder of Factor Advisors. “I was determined to bring greater efficiency to spread trading. With the creation of FactorShares, spread trading among the major asset classes requiring two separate positions and indiscriminate rebalancing is in the past.
The funds provide two times long futures and short futures exposure, rebalance daily and are meant to be hold for just a day.
The funds are: FactorShares 2X S&P 500 Bull/TBond Bear, FactorShares 2X TBond Bull/S&P 500 Bear, FactorShares 2X S&P 500 Bull/USD Bear, FactorShares 2X Oil Bull/S&P 500 Bear and FactorShares 2X Gold Bull/S&P 500 Bear.
Factor Advisors has also formed a partnership with electronic trading broker Interactive Brokers to offer its clients commission-free trading of the FactorShares ETFs with no minimum holding period and no short-term trading fees.