Mon, Oct 22, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

In the ETF era, emerging managers could stand out

Tuesday, January 09, 2018

Bailey McCann, Opalesque New York for New Managers:

According to recent data from EY, asset flows into ETFs could increase by as much as 73 percent over the next two to three years. As investors flock to these lower cost vehicles, it will become harder and harder for large hedge funds to justify their fees and lockups. Delegates at the recent Opalesque Chicago Roundtable suggest that the push into ETFs could create unexpected opportunities for emerging managers.

Scott Billington, Co-Founder, Covenant Capital Management notes that emerging managers can take advantage of micro-market opportunities created by ETFs that might otherwise be ignored by larger hedge funds. "Trading around these ETFs that have published formulaic rules that they have to follow in the exchange of their underlying instruments, whatever they might be, can be meaningful," Billington explains. "I do think that can create a number of potentially exploitable inefficiencies. And then perhaps so many people come in and try to do that that other inefficiencies appear elsewhere."

By being able to take smaller positions and react dynamically to changes in the market, emerging managers could have a leg up over larger funds, where small trades are uneconomic. Billington's view was echoed by Anthony Lombardi, Associate Partner, at consulting firm Aon Hewitt. "When we talk about managers who are looking to exploit certain......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. BB&T Securities to bolster alternative investment offerings with CAIS platform[more]

    Laxman Pai, Opalesque Asia: The financial services firm BB&T Securities has selects the financial product marketplace CAIS to expand alternative investment access for advisors. A press release from the wholly owned subsidiary of BB&T Corporation said that with CAIS, it will gain access to pr

  2. Europe: Europeans up interest in unconstrained bond strategies, Generali steps up efforts to build multi-boutique business, Nordea bank in new Russia funds complaint, FCA proposes climate risk reporting duty for asset managers[more]

    Europeans up interest in unconstrained bond strategies Unconstrained bond assets are on the rise. Across both retail and institutional accounts, assets under management in these strategies rose from $153.2 billion in Q2 2013 to $289.7 billion in Q2 2018, for a five-year compound annual

  3. Stock slump aftermath: Hedge funds got caught long and wrong before stock slump, The huge 'blackout' that may be deepening market turbulence, Market veterans don't see the bottom yet: 'More selling is yet to come', Hedge funds hold up in rout as defensive stance finally pays off, Rally erupted in gold market days after funds made big bear bet[more]

    Hedge funds got caught long and wrong before stock slump From Bloomberg: In a moment of bad market timing, hedge funds had increased their bullish bets on U.S. stocks to the highest since February, and second-highest in five years, just before last week's sell-off. Speculative net

  4. Robert Citrone's discovery cashes in on bearish bets[more]

    From Institutional Investor: The macro hedge fund is riding strong gains since mid-year thanks to savvy wagers against Italian fixed income and other instruments. Macro hedge funds are finally getting a reprieve, between the bond market selloff and overall financial market volatility - two even

  5. Hedge funds at the 'core' of stock slump may be done offloading, Why hedge funds will stick with ever-risky short volatility trades[more]

    Hedge funds at the 'core' of stock slump may be done offloading From Bloomberg: One quantum of solace for bruised stock bulls: Some of the usual suspects behind last week's rout may be done frightening markets. Equity long-short hedge funds are among the worst-performing categori