GLOBAL - Investment consultants have questioned whether the majority of pension funds will implement 130 / 30 strategies, despite a new study claiming the philosophy is not a passing fad.
The worldwide survey, conducted by Terrapinn and AllAboutAlpha.com, examined the investment attitudes of asset managers, consultants, institutional investors and service providers.
According to the results, 16% of investors polled have already implemented 130 / 30 strategies, and 26% of investors are planning to use the approach in the next 12 months. Some 25% of consultants have also been actively researching and advising on it.
The study also examined how investors allocate to the strategy and what approach asset managers offer.
Of investors actively allocating to 130/30 funds, or planning to do so in the next 12 months, 55% preferred quantitative strategies, while 18% preferred fundamental strategies.
Responding to the findings, Andrew Cheseldine, a consultant from Hewitt, agreed 130/ 30 strategies were here to stay, but said it was debatable whether they would be a part of the majority of portfolios.
Michael Berg, a partner at Lane Clark & Peacock actuaries and consultants, said his impression was that 130 / 30 strategies have not been heavily used by pension funds.
He said: “130/ 30 strategies offer the opportunity to enhance returns but selection of the funds is quite important as the skills of a good long only manager do not always successfully transfer to 130 / 30 strategies.”
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