A closer look at Bear’s new 130/30 mutual fund
Dec 19th, 2007 | Filed under: Investment Management Fees
130/30 investing is still generally considered to be for institutions only, even though its simplicity and ”hedge fund light” characteristics make it well suited for the retail mutual fund world. Only a handful of 130/30 mutual funds are tracked by Morningstar so far and one Canadian 130/30 fund prospectus was actually pulled from the market (for reasons unrelated to the strategy itself).
But sensing the vast potential, a large US financial services firm filed their own 130/30 mutual fund prospectus on Monday. That firm is none other than Bear Stearns. As Morningstar’s Marta Norton tells the Wall Street Journal this is surprising since Bear doesn’t have many mutual funds. Says Norton:
“…so in that sense it’s surprising. But a lot of the fund shops — outside of Fidelity [Investments], which is launching a 130/30 fund — aren’t necessarily big players in other areas of the mutual-fund business, so it’s not surprising to see kind of a new entry here. Bear Stearns is an investment bank; it has hedge funds, so it plays a lot in those spaces.”
The preliminary prospectus, filed with the SEC on Monday, reveals the following about the “Bear Stearns Multifactor 130/30 US Core Equity Fund“:
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haha, I’m sure the shorts in this 130/30 will go opposite way and it will blow up like thier High Grade Structured Funds. Seriously, what kind of people give money to BSAM?