Analysis: the end of the short-sellers?
Have hedge fund managers just lost it? More and more leading managers are returning assets to their clients. The reason is the melt-up of the market, making it ever harder for short-sellers to identify profitable trades.
For example, this summer John Paulson (photo), who earned $15 billion from the collapse of the US housing market in 2008, known as “The Greatest Trade Ever”, announced his departure from the hedge fund industry. Others, such as George Soros, Stanley Druckenmiller and David Tepper, preceded him.
Why factor investing keeps disappointing
Due to a sustained period of underperformance, investors are increasingly questioning the validity of factor investing. Georg Elsaesser, Portfolio Manager Quantitative Investment at Invesco, has a simple explanation for the underperformance, and is not worried, yet.
‘The value factor and small-caps in particular have done badly, but that can be explained by the market environment. All factors are still doing what they are supposed to do,’ says Elsaesser.