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Big funds usually dont try to beat the market, they try to dampen volaility while tracking the S&P 500
by ldjkfkdsjnv 2y ago
Big funds usually dont try to beat the market, they try to dampen volaility while tracking the S&P 500
- stanford_labrat 2y agoeven small funds, this was the investment thesis at the hedgefund that my dad worked for circa 2006-2008. they promised super dampened volatility but, as you might guess, they went belly up during the great recession. The cause? Someone, somewhere in their financial product chain was not being faithful about the volatility of the asset they were basing their whole model on so when the market went tits up they did to.
- paulpauper 2y agoyeah. 'market neutrality' often means misplaced/unseen risk elsewhere