In Financial competency, Financial planning on 09/12/2014 at 11:51 am
Do you, as a pension-fund manager, or rich individual investor, think that you have an above-average ability to pick out the non-superstar hedge funds that will outperform in the future? And if so, why? Also, is your superior fund-picking ability worth the average hedge-fund fee?
If you decide the answer is “no,” then you should consider investing in an index such as the HFRX Global Hedge Fund Index, which replicates hedge-fund returns net of fees — so it helps with portfolio diversification but not fee reduction.
In Financial competency on 08/12/2014 at 12:02 pm
Sure he underperforms S&P but it’s like being paid by an insurance co. to buy life insurance.
BEARISH FUND VS. THE BULLS STILL PROFITS The stock market has been rising for years, but Universa Investments, one of Wall Street’s most bearish investors, has found a way to make money anyway, Peter Eavis writes in DealBook. The hedge fund, founded by Mark Spitznagel, is set up with the aim of making money in an economic and financial collapse. Big pessimistic bets usually lose a lot of money when stocks are rising, as they have since 2009. But Universa is saying that its investment strategy has been able to produce consistent gains since then, including a 30 percent return last year, according to firm materials that were reviewed by The New York Times. The benchmark Standard & Poor’s 500-stock index in 2013 had a return of 32 percent with dividends reinvested.
Mr. Spitznagel’s strategy stems from his skepticism toward government efforts to revive the economy. He acknowledges that the stimulus policies of the Federal Reserve and other central banks have the power to drive stocks higher. But they will ultimately be self-defeating, he contends. This theory holds that another crash will occur when the Fed stops being able to stoke the economy. Universa’s strategy seeks to profit when confidence in the central banks is strong ‒ and when it evaporates. “The Fed has created a trap in this yield-chasing environment,” Mr. Spitznagel said in an interview. The Universa strategy has produced gains of 10 percent this year, slightly less than the stock market overall. It’s been up every year since 2008, according to the materials.
Universa is not alone in saying that it can make money in good times and bad. Other firms also offer bearish bets that clients can use to hedge their stock portfolios. Such bets often cost so much that they have to be used sparingly. Yet Universa seems to be saying that its catastrophe insurance is comparatively cheap. The Universa marketing materials say that its strategy would theoretically result in a 16 percent gain if the S.&P. 500 fell 30 percent. For his part, Mr. Spitznagel is certain that another collapse will come.
In Commodities, Corporate governance on 28/11/2012 at 5:21 am
It’s been over a week since Muddy Waters made allegations about the accounts of Olam. Since then Olam has come out swinging, refuting the allegations and suing.
Yesterday evening, the report was made available. Most of the issues have been flagged by analysts earlier. But there are issues about the restatements of accounts that don’t affect profits and capex that need addressing by Olam.
Remember Temasek owns 16% of Olam. So it too will be studying the report.
In Financial competency on 19/07/2012 at 6:22 am
Before they discovered hedge funds, pension funds and endowments typically held portfolios with 60 percent in equities and 40 percent in bonds. Many would be better off if they had stuck with the old formula.
Hedge funds have trailed both the Standard & Poor’s 500 Index and a Vanguard index fund with the same 60/40 mix over the past five years, according to data compiled by Bloomberg. The balanced fund beat the main Bloomberg hedge-fund index in six of the last seven calendar years, according to data compiled by Bloomberg.
Still as Bloomberg News reports: “GLG Partners, a unit of the world’s largest publicly traded hedge fund manager, formed a long-short equities team in Asia co-headed by a former fund manager at Singapore’s sovereign wealth fund, seeking opportunities in the region’s stock market.” http://www.bloomberg.com/news/2012-07-15/glg-forms-asia-equities-team-co-headed-by-former-gic-manager.html
In China, Emerging markets on 14/06/2012 at 7:11 am
In Economy on 06/06/2012 at 6:21 am
Smaller Asian hedgies are closing (US$120m is “peanuts”). http://www.reuters.com/article/2012/06/04/lehman-hedgefund-closure-idUSL3E8H420G20120604
Not gd news for S’pore’s financial centre aspirations. It once (pre 2007 crisis) had lax rules to get these guys in, hoping they would grow.
But hope springs eternal.
Coming our way? Many of funds in Switzerland had juz relocated from London. But now the Swiss government is considering rules that would turn a relatively “light-touch” regulatory environment into “one of the most exacting jurisdictions in the world to run a hedge fund,” the Financial Times reported about two months ago.
Funny that our constructive nation-building media don’t report this news. Been too busy sliming WP, to report on a possible positive development.