The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Study: Hedge-Like Funds Are More Correlated With Stocks Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, July 10, 2013

Study: Hedge-Like Funds Are More Correlated With Stocks

News summary by MFWire's editors

Diversification: It's one of the primary reasons investors like funds that use hedging strategies. Now that the market is experiencing some volatility, investors are more likely to gravitate to those funds, but there's a problem. Alternative funds may be becoming more correlated with stocks, Murray Coleman of the WSJ writes.

A study by Leuthold[profile] Group shows that from 1994 to May of this year, hedge fund correlations have begun inching up to 0.75, almost 36 percent higher than earlier levels. The study found hedge funds are tending towards the movement of stocks three-quarters of the time, Coleman reported.

Advisors using alternative funds have been more likely to use cheaper ETFs and ETNs, but alternative ETFs cost 136 percent more than a traditional ETF rival, Morningstar data shows.

To use an alternative-fund strategy besides hedging, Mark Donnelly, a PM at AEPG Wealth Strategies, said that he holds a wide variety of ETFs, such as commodities, natural resource stocks and Treasury Inflated Protected Securities.
"The big picture view is that increasing correlations between alternatives and equities are probably here to stay," Mr. Donnelly says. "But it's a mistake to lump all of these funds together."
To read more, click here.  

Edited by: Casey Quinlan

Stay ahead of the news ... Sign up for our email alerts now

 Do You Recommend This Story?

Return to Top
 News Archives
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Add to My Yahoo!
follow us in feedly

©All rights reserved to InvestmentWires, Inc. 1997-2019
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use