Now that everyone is back from the Morningstar Investor Conference and ready to relax a bit over the weekend, here are few highlights from the week’s news. At #1 this week is Jason Zweig’s discussion about the closure of a recent Natixis fund managed by Alpha Simplex. Fund closures are anything but new in this industry, but Zweig reminds us that not every product is going to survive. In fact, when I looked recently into one category of alternative mutual funds, I found that in the past 10 years, 48 long/short equity funds have closed and another five have merged with other funds. There were 119 live funds in the category at the time, so the closure rate can be very high – it just doesn’t get talked about much.
Further on in the reading at #5 is a detailed review of the energy market – this is worth reading as I believe we are in the early innings of a real shift in the the U.S. energy business. At #7 is an article discussing a potential global macro product from BlackRock, and finally, be sure to check out #9, the smart beta slugfest.
Have a great weekend.
1. When Hedging Cuts Both Ways (The Wall Street Journal, Subscription Required)
Jason Zweig explains the closure of the Natixis ASG Diversifying Strategies Fund and the importance of understanding the role of alternatives in a portfolio.
2. Hedge Fund for Everyone? (Financial Planning)
A short explanation of how to get hedge fund exposure through hedge fund replication funds.
3. Unconstrained Bond Funds: An Increasingly Popular Way to Seek Total Return (Lipper Insight)
An explanation of unconstrained, or non-traditional bond funds.
4. 3 New Non-Traditional-Bond Funds Leap into the Fray (Morningstar)
Flows to the non-traditional bond category have been strong, and managers are responding with more new products.
5. Master Limited Partnerships Positioned to Benefit from Rising U.S. Energy Production (Pensions & Investments)
A good primer on MLPs and the growing energy industry, written by Gregory A. Reid and Scott Fogleman of Salient.
6. Advisers Turn to Alternative Mutual Funds on U.S. Rate Rise Fears (Reuters)
A discussion about the growth of alternative mutual funds.
“Every hedge fund firm is working on a liquid alternative product,” said Nadia Papagiannis, director of alternative investment strategy for global third-party distribution at Goldman Sachs Asset Management.
7. BlackRock Readies New ‘Global Macro’ Fund for Retail Investors (Reuters)
Global macro mutual funds are scarce and one from BlackRock would be welcomed.
8. GAIM: Liquid Alternatives’ AUM Could Soon Rival Hedge Funds (COOConnect)
Discussion about liquid alternatives from participants of the GAIM Conference, and includes some perspectives on what is happening outside the U.S. in this area.
“We feel liquid alternatives today are in a similar position to ETFs in 2006, and they are something we looking at closely. Liquid alternatives are cheaper than hedge funds, and offer better transparency through their daily Net Asset Value (NAV) disclosures to us,” said Stephanie Margaronis, chief executive officer (CEO) at Targamar, a family office in London, speaking at the GAIM conference in Monte Carlo.
9. Brightman, Ferri Slug It Out Over Smart Beta (ThinkAdvisor)
Great to see some open debate about beta. A few left hooks, right jabs and shots to the gut.
10. MasterClass: Where Liquid Alts Fit in Today’s Portfolios (asset.tv)
An extensive video discussion on how to use liquid alternatives in a portfolio.