Hedge Funds

Oil and tech’s crash have wrecked hedge funds

Between 2015 and 2017, more hedge funds liquidated than launched, according to HFR. So far this year, 306 hedge funds have launched, compared with 270 that liquidated. And the total number of hedge funds stands at 8,339, down from the peak of 8,474 in 2015, according to HFR.

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Number of hedge funds is more than number of listed companies :joy:

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Factor ETF’s are the new hot thing. Did you look into them?

No. I don’t like derivatives :angry: except VOO

Factor is not about derivatives. For example there could be an ETF that only invest in companies with low price to book, the classic “value” definition. Another could be investing in stocks with high price momentum.

There are like a gazillion of these funds out there. Sort of roll your own hedge funds. With tools like this who needs hedge funds?

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https://www.barclayhedge.com/solutions/assets-under-management/hedge-fund-assets-under-management/

This is kind of cool data. Hedge funds control $3T of investments. It breaks it down by type. Since the start of the year, they are less exposed to emerging markets. They’ve increased their long biased equity and fixed income.

Options strategies are tiny. I guess that’s not surprising given big their AUM are. They usually can’t buy enough options to hold a meaningful position without completely distorting market pricing.

I think the data shows it’s unlikely that hedge fund selling is behind the market decline. I guess that makes the magic question: who’s selling? Corporate buybacks are at record levels.