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Press release from Business Wire

AlphaClone and Exchange Traded Concepts Launch First ETF to Invest Directly in Hedge Fund Equity Positions

<p class='bwalignc'> <i>AlphaClone Alternative Alpha ETF (NYSE: ALFA) Provides Risk-Managed Access to Hedge Fund Positions</i> </p>

Thursday, May 31, 2012

AlphaClone and Exchange Traded Concepts Launch First ETF to Invest Directly in Hedge Fund Equity Positions09:00 EDT Thursday, May 31, 2012 SAN FRANCISCO (Business Wire) -- The AlphaClone Alternative Alpha ETF (NYSE: ALFA) begins trading today, becoming the first exchange-traded fund (ETF) to invest in disclosed equity positions held by established hedge fund managers. The new ETF seeks to capture alpha from these managers' long positions while protecting against protracted market downturns through a dynamic hedge mechanism. The ETF structure enables ALFA to provide investors access to the alpha-generating potential of established hedge fund managers within a transparent vehicle that is available for trade daily on the NYSE. ALFA, derived from the innovative research and hedge fund replication methodology developed by AlphaClone, LLC, and its founder Mazin Jadallah, is based on the passive, risk-managed AlphaClone Hedge Fund Long/Short Index. “AlphaClone offers our separate account clients strategies that expertly combine long hedge fund equity positions with disciplined downside protection,” says Mazin Jadallah, founder and CEO of AlphaClone. “With the introduction of ALFA, investors around the world can now access our proven investment approach in a transparent and easy to access vehicle that can help navigate today's challenging market environment.” Different from hedge fund beta factor replication, the AlphaClone index directly selects its long positions from public disclosures using AlphaClone's proven Clone Score ranking. This proprietary methodology measures the efficacy of following managers based on their disclosures over a complete market cycle (since 2000). The index also incorporates a rules-based hedge mechanism that adjusts holdings between being long only and market hedged based on certain technical price targets for a broad index of US equities. ALFA is the first ETF to result from AlphaClone's partnership with the International Securities Exchange, a leading US options exchange. AlphaClone and ISE recently partnered to promote AlphaClone's index research and investment strategies. Exchange Traded Concepts, LLC, serves as investment adviser to ALFA. Knight Clearing Services LLC is the Lead Market Maker. For more information on ALFA, please visit http://alphaclonefunds.com. About AlphaClone AlphaClone is a registered investment advisor and equity research firm that is a leader in the field of hedge fund position replication. AlphaClone's research approach seeks to give investors direct, risk-managed exposure to stock positions expertly derived from hedge fund public disclosures. The firm's investment products seek to provide investors with an accessible and affordable alternative to hedge funds . The firm offers managed accounts as well as the AlphaClone Alternative Alpha ETF (NYSE: ALFA) and is based in San Francisco, California. To learn more visit the firm's website at www.alphaclone.com. The fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectus contains this and other important information about the investment company and it maybe obtained by visiting www.alphaclonefunds.com. Read it carefully before investing.Investments involve risk. Principal loss is possible. The AlphaClone Alternative Alpha Fund has the same risks as the underlying securities traded on the exchange through out the day. Redemptions are limited and often commission are charged on each trade. The fund can make short sales of securities, which involves the risk that losses in securities may exceed the original amount invested in a security. Investments by the fund in derivatives involve risks different from, and in certain cases, greater than the risks presented by more traditional investments. The fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund.REITs may be affected by changes in the value of their underlying properties or mortgages or by defaults by their borrowers or tenants. Furthermore, these entities depend upon specialized management skills, have limited diversification and are, therefore, subject to risks inherent in financing a limited number of projects. In addition, the performance of a REIT may be affected by changes in the tax laws or by its failure to qualify for tax-free pass-through of income. Investments in securities of MLPs involve risks that differ from an investment in common stock. Holders of the units of MLPs have more limited control and limited rights to vote on matters affecting the partnership. There are also certain tax risks associated with an investment in units of MLPs. In addition, conflicts of interest may exist between common unit holders, subordinated unit holders and the general partner of a MLP, including a conflict arising as a result of incentive distribution payments. The performance of the Fund may diverge from that of the Index. Because the Fund employs a representative sampling strategy, it may experience tracking error to a greater extent than a fund that seeks to replicate an index. The AlphaClone Hedge Fund Long/Short Index represents equity securities that are favored by hedge funds and institutional investors in their public disclosures. The index is equal weighted with an overlap bias which gives a security held by twice the number of managers twice the weight. The index is reconstituted quarterly and can vary between being long only and market neutral. It is not possible to invest directly in an unmanaged index. Alpha is the abnormal return on a security or portfolio in excess of what would be predicted by an equilibrium model like the Capital Asset Pricing Model (CAPM). This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. The AlphaClone Alternative Alpha Fund is distributed by Quasar Distributors, LLC. The fund's investment advisor is Exchange Traded Concepts LLC. Quasar is not affiliated with AlphaClone, Exchange Traded Concepts, ISE or Knight Clearing Services. AlphaClone LLC and ISE are unaffiliated and have formed a partnership to develop and promote exchange-traded products based on AlphaClone's research. The AlphaClone logo is a service mark of AlphaClone LLC. for AlphaCloneLuke Napoli, 610-228-2127Luke@GregoryFCA.com