The passive investing wave is coming to hedge funds.
Aberdeen Standard Investments and Hedge Fund Research Inc. are charting new territory by creating a fund that tracks HFR's broad index of 500 hedge funds.
The product will allow wealthy investors and institutions to play in the rarefied world of hedge funds without having to kick their tires or deal with the egos.
"For the first time you can have access to the space without having the internal costs of selecting managers or paying a premium for someone to externally handle that manager-selection alpha for you," said Russell Barlow, global head of alternative strategies at ASI, which oversees about $670 billion. "You can just buy the passive version."
The development is a testament to just how far-reaching index funds have become, touching almost every asset class. And it comes as stock pickers were dealt a big blow Wednesday as assets in U.S. index-based equity mutual funds and exchange-traded funds topped those in active stock funds for the first time in August.