Comments on: Media turns hostile: 130/30 now “dubious” “overblown” “faddish” “hype” http://allaboutalpha.com/blog/2008/04/21/media-turns-hostile-13030-now-dubious-overblown-faddish-hype/ Hedge funds, portable alpha, 130/30 and alpha-centric investing Thu, 18 Mar 2010 13:53:53 +0000 http://wordpress.org/?v=abc hourly 1 By: Walt French http://allaboutalpha.com/blog/2008/04/21/media-turns-hostile-13030-now-dubious-overblown-faddish-hype/comment-page-1/#comment-99735 Walt French Thu, 24 Apr 2008 02:33:18 +0000 http://allaboutalpha.com/blog/2008/04/21/media-turns-hostile-13030-now-dubious-overblown-faddish-hype/#comment-99735 By design, 1X0/X0 funds are meant to give investors more of a portfolio's active strategy for every dollar invested, without changing the level of market exposure. Period. A manager who is successful with a long-only strategy should be maybe half again more successful with 1X0/X0, versus a correct benchmark. Since there's so much debate as to whether active managers can add any value over fees, it's unsurprising that more of those strategies, with no letup of fees, will generate similar debate as to whether the approach adds value. It's reasonable to hope that more savvy managers will be in the avant garde for 1X0/X0, but why wouldn't the best clue be how well these managers do with long only? By design, 1X0/X0 funds are meant to give investors more of a portfolio’s active strategy for every dollar invested, without changing the level of market exposure. Period. A manager who is successful with a long-only strategy should be maybe half again more successful with 1X0/X0, versus a correct benchmark.

Since there’s so much debate as to whether active managers can add any value over fees, it’s unsurprising that more of those strategies, with no letup of fees, will generate similar debate as to whether the approach adds value.

It’s reasonable to hope that more savvy managers will be in the avant garde for 1X0/X0, but why wouldn’t the best clue be how well these managers do with long only?

]]> By: Tuesday links: trade planning « Abnormal Returns http://allaboutalpha.com/blog/2008/04/21/media-turns-hostile-13030-now-dubious-overblown-faddish-hype/comment-page-1/#comment-99249 Tuesday links: trade planning « Abnormal Returns Tue, 22 Apr 2008 16:14:20 +0000 http://allaboutalpha.com/blog/2008/04/21/media-turns-hostile-13030-now-dubious-overblown-faddish-hype/#comment-99249 [...] 130/30 managers do not face unique challenges, that long-only investors somehow avoid. (All About Alpha) [...] [...] 130/30 managers do not face unique challenges, that long-only investors somehow avoid. (All About Alpha) [...]

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