April 3, 2012
- in Uncategorized by schooloftrade
Changing of the Guard for Hedge Funds
The dynamics of the hedge fund industry are changing and so are the managers. The days of expert networks, massive fund inflows and controlled trading are history.
Hedge funds are seeing outflows compared with other investments, like high frequency trading funds and ETFs with lower fees. For the traders at mediocre hedge funds, it’s exit time.
A common hedge fund strategy in 2012 is to overweight in Apple(NASDAQ:AAPL). For many of the top performing funds, the performance can be attributed to concentration in Apple holdings, which are up 50% in the first quarter. UBS estimates the S&P 500′s Q1 2012 earnings could rise twice as fast with Apple as without it. The star of tech sector is widening the gap from the rest according to Barclay’s Capital (tech.fortune.cnn.com). The extraordinary performance of Apple has been crucial to hedge funds.
Uncorrelated + Uncorrelated + Uncorrelated = Correlated
Read the complete article here
