130/30 bull run still has some legs: S&P

130/30 24 Jun 2008

Hedge Funds Review reports that S&P is telling clients that 130/30 is “strategy to watch in 2009” (no word on what to watch now or for the next six months – but it’s an ugly year anyway).

Taking a page from Andrew Lo, co-author of the recent academic paper “130/30: The New Long-only“, S&P’s Srikant Dash told a London audience earlier this week that “Asset managers are moving into this area and eventually these funds will take a significant share from traditional active funds”.

This year may not be a bust though.  Referring to one particularly aggressive market estimate, another S&P official apparently said 2008 could also be shaping up to be a barn-burner:

“I know of one analyst who predicted there would be $1.6 trillion by the end of 2008 linked to 130/30 funds”.

According to Hedge Funds Review, S&P is launching two new 130/30 indices later this year.  This, after an S&P-authored research paper recently argued that the best benchmark for 130/30 funds is probably a long-only index (see related posting, read report).  Maybe that was a different “S&P” (?)

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