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1. (Tied) The Global X Guru Holdings Index Fund (GURU) / AlphaClone Alternative Alpha ETF (ALFA)

Tie for No. 1 goes to the The Global X Guru Holdings Index Fund and the AlphaClone Alternative Alpha ETF. While these new funds may sound brilliant in concept, they’re simply wrongheaded. They attempt to give the little guy a taste of the holdings in hedge funds, gleaned off their 13-F SEC filings or some proprietary stock-picking method. Just one problem: Piggybacking on trades by others, by its nature, is a dangerous concept because the ETF will only know 45 days after the fact when the funds they’re watching bought and sold. Not weird, perhaps, but definitely off the scale in just plain silly.

As you might guess, Global X CEO Bruno del Ama and AlphaClone founder Maz Jadallah don’t agree. “The methodology of the index automatically filters out high turnover managers, leaving only managers that tend to have longer term holdings where the exact day in which a security is bought or sold has less of an impact,” del Ama says. “The index also includes the largest holding of each selected manager, which is indicative of a high conviction idea that is often bought and sold over a longer period of time.”

And Jadallah, whose company was founded as a 13-F research service, says that “hedge fund holding periods, despite the popular perception of being short term in nature, are actually about a year on average and usually much longer for their largest positions. The key to success in ALFA’s strategy is manager selection — there are a lot of hedge fund managers but only a subset provide persistent alpha-generation by cloning their reported holdings.”

Photo: Getty Images | CNBC Composite