CME High Frequency Trading Claim: Really?

Chidem Kurdas

If the allegations made in the lawsuit filed April 11th by three traders against CME are true, then executives of the exchange who can be shown to be involved should face criminal charges.

Replicator Beats Managers

An index that tracks reproducible hedge fund performance had significantly higher return than actual hedge funds in the period that started January 2008. Boris Arabadjiev, chief investment officer of the Credit Suisse fund of hedge funds group, found that this replicator outperformed underlying hedge fund strategies by as much as three to five percentage points.

What does it mean?

Advertisement

Event-Driven Mutual Fund vs. Hedge Funds

Chidem Kurdas

Mutual funds are increasingly offering less widely-available hedge fund strategies. Thus Rydex/SGI, a pioneer in the field, introduced an event-driven and distressed investing fund this month, in addition to funds in other alternative strategies.

Big investors developed an interest in such mass-market vehicles in the aftermath of the 2008 crisis, when getting one’s money back from hedge funds became so difficult.

Paulson Gold Bet DIY?

Chidem Kurdas

One could fairly easily build a Do-It-Yourself version of Paulson & Co.’s portfolio of gold and gold-related businesses. Its largest component  is an exchange-traded fund, the SPDR Gold Trust—nothing could be simpler. You could ask why  people pay hefty fees to Paulson & Co. to buy an ETF.

Others are busy trying to replicate the Paulson gold fund, launched at the beginning of this year.

Goldman Replicator: Mixed but Promising Results

Chidem Kurdas

Goldman Sachs runs a hedge fund tracking strategy that buys and sells instruments like futures contracts according to a benchmark. Replicating hedge fund returns has been a topic of interest to investors for several years.

So how does the Goldman tracker compare to actual hedge funds? There’s some bad news. In 2009, Class A shares in the Goldman tracker fund returned 5.75%. That’s substantially lower than returns for hedge funds as a group.