Equity long/short mutual funds “could easily grow twenty-fold over the next five years:” Report
| Nov 9th, 2009 | Filed under: Retail Investing, Today's Post | By: Alpha Male |
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Readers of the FT over the weekend learned that “a new breed of hedged mutuals grows apace.” The paper reports that investor demands for liquidity and transparency in hedge funds have forced managers to “try something different.”
But as regular AAA readers are aware, the convergence of hedge funds and mutual funds have been occurring for several years (see end of this post). In fact, we covered a seminal paper on this subject 3 years ago. In “Hedge funds for retail investors? An examination of hedged mutual funds” Vikas Agarwal, Nicole Boyson, and Narayan Naik wrote:
“Recently a number of mutual fund companies have begun offering mutual funds that emulate hedge fund strategies, with assets tripling since 2002…over half of the Registered Investment Advisers who do not currently use hedge funds for their clients would add hedged mutual funds to their portfolios.”
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[...] “As hedge funds and mutual funds begin to eat each other’s lunch, their leverage levels are also converging.” (All About Alpha) [...]