Economics
Hedge Funds Can't Resist This Volatility Trade That's Been Losing Money
- Global Sigma, BTG Pactual among firms adding volatility funds
- Bets on higher market turbulence have backfired this year
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Does the lack of worry in global financial markets worry you? A growing number of hedge fund managers are counting on it.
Brevan Howard Asset Management, 36 South Capital Advisors, One River Asset Management and at least three other firms are rolling out new funds designed to protect investors from rising market turbulence. While so-called long volatility strategies have been some of this year’s worst performers, everyone from Nobel laureate Richard Thaler to BlackRock Inc. Chief Executive Officer Larry Fink has warned that the unusual state of calm in markets may not last.