BlueStar Capital, a U.S.-based fund of hedge funds manager, will short healthcare and biotech exchange traded funds if its BlueStar Life Sciences fund of funds net equity holding sinks below preset targets. Jonathan Lack, ceo and portfolio manager in Westport, Conn., said shorting healthcare or biotech ETFs would allow the fund of funds' asset allocation to be rebalanced within its investment objectives.
BlueStar's target asset allocations have been set at 35% for biotech equity, with all equities accounting for 50%. The fund of funds invests in nine funds, said Lack, declining to give assets under management.
BlueStar does not have a prime broker for the fund and would select counterparties according to price, service and capability in finding ETF buyers, said Lack.
