UConn’s Endowment Is Abandoning Hedge Funds for New Kind of ETF
- Many hedge funds “don’t justify the fees,” says UConn’s Ford
- $634 million endowment using buffer ETFs to help mitigate risk
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The University of Connecticut’s endowment is turning away from hedge funds and embracing a cheaper way to mitigate risk in its $634 million investment portfolio.
The UConn Foundation sold almost all of its hedge fund exposure during the most recent fiscal year and bought so-called buffer ETFs, said David Ford, chairman of the investment committee. The increasingly popular exchange-traded funds, which use options to protect against losses while capping upside gains, have amassed more than $58 billion in assets, almost all within the past three years.