First quarter suggests 130/30s don't short well

Wed Apr 30, 2008

The 130/30 market has been growing by leaps and bounds, but that growth could very well slow, given recent performance. In this year's rough first quarter, 130/30 funds lost a median 10.46%, according to eVestment Alliance. That's slightly worse than the S&P 500's decline of 9.9% and significantly worse than their stated goal, which is to outperform their benchmark by 200 to 500 basis points.

The quarter's performance is in sharp contrast to 2007, when 130/30s outperformed the S&P on a gross basis, gaining a median 6.98% versus the S&P's rise of 3.56%....

ISSN: 2151-1845 / CDC10004H

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