130/30 once had “cool factor” now has fleas?
May 20th, 2009 | Filed under: 130/30, Today's Post
130/30 has apparently gone from the cat’s meow to doggone unpopular.
P&I reports this week that investors are “abandoning” 130/30 strategies. However, the reality, as the article goes on point out, isn’t quite as dramatic. According to the magazine’s widely followed semi-annual survey of short-extension managers, 130/30 AUM is down a little over 30% over the past 6 months. With year over year AUM down 20%+ for the asset management sector overall, this may not actually qualify as “abandoning” – but “shying away” to be sure. Reports the newspaper:
“In a risk-averse environment, 130/30 has lost its cool factor, with investors shying away from the strategy after getting clobbered in the market downturn.”
At an estimates US$50b managed by a handful of money managers (see P&I league table here), short extension funds were never more than a nascent sector. Like all new industries, percentage increases and decreases can look pretty dramatic.
This point is apparently not lost on several 130/30 managers interviewed by P&I. The head of UBS’s long/short business told the newspaper: More…
To continue reading this article please login (at the right) or click here to learn more about accessing our archives.
Related Posts
- Un-named Event: Power bars, the factor factor, the alpha meal plan, and the Mick Jagger of finance
- Manager finds factor-replication “blunt” and distributional-replication “suspiciously opaque” – advocates mechanical trading instead
- Factor Modeling and Benchmarking of Hedge Funds: Can Passive Investment in Hedge Fund Strategies Deliver?
- 130/30 funds: So much for $2 trillion by 2010…
- (Bilingual) Reader Mail: Many managers “poorly equipped” for 130/30
[...] http://allaboutalpha.com/blog/2009/05/20/13030-once-had-cool-factor-now-has-fleas/ [...]