A review of recent 130/30 surveys

130/30 19 May 2008

Apparently, 130/30 isn’t going away anytime soon.  Another survey of institutional investors released this month says that over half (51%) of public pension plans “are using, seriously considering, or evaluating” 130/30 strategies.  The number was significantly less for corporate plans (31.5%) – a phenomenon uncovered by some previous surveys as well.  On its own “considering” doesn’t mean a lot.  After all, a lot of people “considered” – and subsequently dismissed – the idea of buying “New Coke” back in the 80’s.

So is 130/30 the New Coke of asset management?  Will we eventually pine for the “classic” version of our favorite active managers?  This survey, for one, suggests not – only 14% of pensions thought 130/30 was a “passing trend”.

This is another in a growing body of surveys on 130/30 (of which our 2007 survey with Terrapinn is a part).  So we thought this might be a good time for a re-cap.  Below is a quick list of all the 130/30 industry surveys we can immediately recall (in chronological order).  If we have missed any, please let us know.

2006

  • Survey sponsor: Pyramis Global Advisors (Link to source)
  • Survey conducted: October/November 2006
  • Sample: 214 US public and corporate defined benefit pension plans with assets over $200 million
  • Findings:
    7% using 130/30 strategies
    51% seriously considering 130/30 strategies

2007

  • Survey sponsor: Pyramis Global Advisors (Link to source)
  • Survey conducted: 2007
  • Sample: 157 Canadian defined benefit plans
  • Findings:
    4% already implemented 130/30 strategies
    26% seriously considering 130/30 strategies
  • Survey sponsor: AllAboutAlpha.com and Terrapinn (Link to source)
  • Survey conducted: August 2007
  • Sample: 135 pensions, endowments, consultants, and asset managers
  • Findings:
    16% of investors currently investing in 130/30
    26% considering investing by end of 2008
    38% of all respondents said 130/30 is a marketing fad
  • Survey sponsor: Vodia Group (Link to source)
  • Survey conducted: November & December, 2007
  • Sample: 40 US corporate, public and university pension plans
  • Findings:
    14% invested in 130/30 strategies
    81% in some stage of the evaluation or implementation process for 130/30

2008

  • Survey sponsor: Merrill Lynch (Link to source)
  • Survey conducted: December 2007 (published Jan. 2008)
  • Sample: 200 public and corporate pensions, endowments and foundations (160 US, 40 European)
  • Findings:
    16% currently invested in 130/30 strategies
    32% expect to increase/initiate 130/30 strategies by end of 2010
    Market Size: $1 trillion by 2011
  • Survey sponsor: Infovest21 (Link to source)
  • Survey conducted: Q1, 2008
  • Sample: 57 pensions, endowments and consultants
  • Findings:
    17% are invested in 130/30 strategies
    15% intend to invest this year
    Market Size: $75b globally
  • Survey Sponsor: Pensions & Investments (Link to source)
  • Survey conducted: March 2008
  • Sample: US asset managers
  • Findings:
    Market Size: $66b in US
  • Survey sponsor: Riversource Investments (Ameriprise) & PlanSponsor Magazine (Link to source)
  • Survey conducted: Q1, 2008 (published May 2008)
  • Sample: US corporate and public pension plans
  • Findings:
    51% of public pension plans are using, seriously considering, or evaluating 130/30 strategies
    31.5% of corporate pension plans are using, seriously considering, or evaluating 130/30 strategies
    14% say 130/30 is a passing trend
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