Such funds often perform poorly in up markets, making the business difficult to run between corrections and forcing some out of business. Read More Chanos up asmany shorts stumble Their numbers have dwindled since the crisis, but notable players include Jim Chanos' Kynikos Associates, Dialectic Capital Management, Gotham Asset Management and Kingsford Capital Management. They include Capstone Investment Advisors and Parallax Volatility Advisers.Īnd there are so-called short-biased or short-only funds that specialize in betting against stocks. There are also volatility-focused strategies that perform best when asset prices move up and down quickly. There are the tail-risk funds run by Universa and 36 South, or similar offerings from Pine River Capital Management, Saba Capital Management, Ionic Capital Management and Capula Investment Management. "Turkey life insurance," he said, "is always cheapest right before Thanksgiving."Ī small group of hedge fund managers promise investors protection. "Then they change their minds after a crash and the cycle begins anew."Īnthony Limbrick, a portfolio manager at 36 South Capital Advisors, a $750 million London-based hedge fund firm focused on tail risk products, gave a seasonal analogy. To be effective, it requires that most people think it is nonsensical," said Universa's Spitznagel. "Tail hedging is by definition a very contrarian trade. So why can't investors protect themselves? Managers of protective funds say simple psychological habits make people forget the past. Read More Here's the first 'correction' call.for 2015 "Some clients are showing interest in hedging, but it's mostly just conversations at this point," said Justin Sheperd, chief investment officer at $9 billion fund of hedge funds Aurora Investment Management.ĭata from investment firm tracker eVestment shows that the assets of funds that should perform best when markets drop and volatility spikes are still far below peak assets. Advisors to the largest investors-ultra-high net worth families and institutions like pensions and endowments-have seen a slight up-tick in interest in protective strategies, but not a lot of action. Many clients in Universa's "tail hedging" strategy made returns of about 120 percent in October 2008 alone when the stock market plummeted (a tail-hedge refers to the unlikely-to-occur tails of a bell curve-shaped probability graph).ĭespite that, the big money isn't rushing to buy insurance-like options on the CBOE Volatility Index ( ^VIX)-against a crash. The Miami-based hedge fund firm is advised by Nassim Taleb, author of the 2007 book "The Black Swan: The Impact of the Highly Improbable." Spitznagel may be talking his book-Universa's core strategy is to make money when the market drops-but he has precedent.
"History and logic show that this Fed-manipulated stock market is unsustainable," said Spitznagel, president of $6 billion Universa Investments. Prognosticators like Mark Spitznagel think that music is about to end. "As long as the music is playing," he said at the time, "you've got to get up and dance." Some say investors are following former Citigroup (NYSE: C) CEO Chuck Prince's ill-fated advice from 2007. Every time the market swoons, like it did as October began, it snap backs as bullish traders "buy the dip," as Wall Street calls it. Volatility-a gauge of fear in the marketplace-barely registers. Los Angeles Capital Management & Equity Research Inc.Ĭonnor Clark & Lunn Investment Management Ltd.Ĭambridge Investment Research Advisors Inc.Stocks have gone virtually straight up for more than five years. (or by any of the other funds holding TTI), click the fund name in the "Holder" column of the funds-holding-TTI table below.Ĭharles Schwab Investment Management Inc.Ĭalifornia State Teachers Retirement System For more details on the positions held by BlackRock Inc. With the largest position size having been reported by BlackRock Inc. In total, we count 151 funds holding TTI within the last two filing periods in our coverage universe of 13F filers, Indicate the amount of TTI stock held by each of the funds holding TTI, followed by the TTI position size held by the fund, and lastly theĭate of the quarterly filing period the data represents. The first column indicates the name of each of the funds holding TTI, with a link to that fund's top holdings. On this page, we present all of the funds holding TTI from our database of 13F filers, detailed in the table below.
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