FLSP vs HDG

FLSPAFranklin Systematic Style Premia ETF

HDGBProShares Hedge Replication ETF

In short

FLSP A hedge-fund style trade in an ETF wrapper. FLSP goes long and short across value, momentum and carry rather than just owning cheap stocks, which makes it the odd one out in a cohort of long-only factor funds.

HDG A 2011-vintage try at bottling hedge fund beta: HDG tracks an index that swings long or short across six liquid factors to mirror the broad hedge fund universe's risk and return profile, without owning a single hedge fund.

Stated mandate

FLSP The fund uses a top-down risk-premia strategy focused on value, momentum, and carry factors, taking both long and short positions.

HDG HDG seeks to track the Merrill Lynch Factor Model – Exchange Series, a benchmark designed to provide the risk and return characteristics of a broad hedge fund universe.

Why people hold it

• FLSP Runs both long and short positions, so the outcome hinges on the gap between the stocks it likes and the ones it doesn't, not purely on the market's direction.
• Three return sources under one ticker: value, momentum and carry, blended top-down instead of stacked onto a single stock screen.
• Spreads the bet across roughly 300 positions, so no single name carries the fund.
• Live since 2019 and now a multi-billion-dollar fund, with the daily liquidity and transparency of an ETF wrapper around a strategy usually sold in private vehicles.

• HDG The index takes long or short positions in six factors (US, developed and emerging stocks, small caps, the euro, T-bills), reset monthly. No lockups, no hedge funds.proshares.comcbonds.com
• Costs 0.95% a year, below the typical alternatives ETF, and as a 1940 Act fund it charges no performance fee on top.
• Trading since 2011, an elder statesman in a category where alternatives launches come and go. Pays quarterly and sits in the upper half of its peer group.

Worth knowing

• FLSP At 0.65% a year it costs multiples of plain-vanilla factor peers like VONV (0.06%) and FNDX (0.25%). That is the price tag on the long/short machinery.
• No public index sits behind it, so there is no external yardstick to check it against, and results can look nothing like a US stock index in either direction.
• Distributions land once or twice a year, not on a monthly rhythm.

• HDG Small and thinly traded, so spreads can be wide and large orders move the price. Getting in and out takes more care than with a mainstream ETF.
• ProShares says results can differ materially from the HFRI hedge fund benchmark at times, and the exchange-series index is likely to lag the original model.proshares.comproshares.com 2
• This is hedge fund beta, not a market hedge: the factor mix leans on equity indexes, so it can move down alongside stocks.cbonds.com

Full FLSP profile⁠

Full HDG profile⁠