Alternative Viewpoints: "Survey of Hedge Fund Professionals: 130/30"
Kathryn Wilkens, Ph.D., CAIA
Sun., May 04 - AllAboutAlpha.com
"Survey of Hedge Fund Professionals: 130/30", posted May 4 on AllAboutAlpha.com
Kathryn Wilkens, Ph.D., CAIA
Director of Curriculum, the Chartered
Alternative Investment Analyst Association
Last month, 440 CAIA members responded to a survey on 130/30 funds and I presented the results at Terrapinn's 130/30 conference in Santa Monica. The survey questions were structured around two main themes frequently discussed here at AllAboutAlpha.com:
- What is the most appropriate benchmark for 130/30 funds?
- What best describes your opinion about 130/30 funds?
When I first posed the question to the attendees at the Terrapinn conference, all but one responded that a standard long-only equity index such as the S&P 500 index or the Russell 2000 is the appropriate benchmark for 130/30 funds. Yet Dow Jones, Credit Suisse, and S&P have all recently developed 130/30 indices (see related AAA postings Dow Jones joins the 130/30 Index Parade, S&P follows CS into 130/30 index business, 130/30 Indices: True indices or like playing chess against a computer?) Two of these indices are classified as a type of "Strategy Index" with another being a so-called fundamental index.
To confuse things further, an index does not have to be a benchmark.