One of the more interesting things about investing is that the race doesn't always go to the swiftest. Assuming you don't live in the sub-microsecond world of ultra high frequency trading then a more measured pace may be for you.
If you can't beat them (hedge fund managers), join them. Mebane Faber and team have created Alphaclone for just this purpose.
Why pay 2 & 20 when you can get by with a far more modest fee of $600/year and a far more transparent portfolio.
AlphaClone follows the publicly filed 13-d statements of various funds allowing you to track some of the portfolio holdings of some of the most successful managers. Yes you will be a little late to the party as 13-d's are filed after the fact, but these are typically positions held by funds for 2-5 or more years.
Even if you don't follow the recommendations of AlphaClone, you may use it as a filter or a "what are they thinking" tool.
For a small price At AlphaClone you get to see the investments of the smart money. Caveat, you won't get to see the thinking behind the selections.
The most recent update from AlphaClone indicates performance of +33% YTD which may not seem like much in the context of an S&P melt-up, but the hedge funds by and large funds held their own during the crisis. AlphaClone can probably help a person in any of 3 ways:
- Filter (for good ideas you have screen it through the list of clones)
- Pointer (Use it to point you in the direction of what may be interesting)
- Portfolio allocator(Should you wish allocate like a clone)
On a $100k Portfolio @ $600 per year it works out to %0.6 which is far cheaper than your active mutual fund manager and AlphaClone provides more transparency and control for your portfolio.
To the team at AlphaClone: How about some embeddable instructional videos on the value and how to use the tool, it would be great education for everyone.
Full disclosure: I have met Mebane Faber a few times for lunch in New York and he seems like a bright guy who wants to do the right thing. Nothing wrong with that.
