Asset management firms, including Merrill Lynch, Goldman Sachs and JPMorgan, have created a new type of product called hedge fund “clones,” or “synthetic” hedge funds, which employ hedge fund strategies without charging the typically high fees or imposing long lock-in periods or high investment minimums, The Wall Street Journal reports. Some are tied to hedge fund indexes, while others use more complex strategies.

Such funds are “a natural evolution in the market,” said Paul Brakke of State Street Global Advisors.

But skeptics say the products are too complicated and, potentially, very risky. They also point out that these products don’t have track records. Two of the oldest are from Rydex Investments. Launched in 2005, they returned 6.6% and 8.4% last year, considerably lower than often cited hedge fund benchmark the HFRA Fund Weighted Composite Index, which rose 12.9%.

Even William Fung, a finance professor at the London Business School who is working with both State Street and JPMorgan on developing such products, had harsh words. “The jury is out, and there’s not enough evidence to convince me these [current] models are capturing the dynamics of the [hedge fund] industry,” Fung said.

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