HONG KONG - Institutional investors at a recent Watson Wyatt Ideas Exchange seminar examining their investment beliefs in equity strategies gave 130/30 funds short shrift.
Traditional passive and traditional active strategies had the highest hypothetical allocation, with 23% each, while long term long only also received 18%. Beta primes (eg fundamental indices) were allocated 13%.
The 50 fund trustees, sponsors and managers at the seminar were also asked to vote on a couple of belief statements.
Some 86% of attendees agreed or strongly agreed the "ability to short expands a manager's opportunity set and ability to generate alpha", while the rest remained neutral.
Meanwhile, 70% agreed or strongly agreed there was more "opportunity to add value in long term investing than short term investing", 22% remained neutral and 8% disagreed or strongly disagreed.
Commented Anthony Chan, principal investment consultant at Watson Wyatt: "Investment is essentially about making judgements and decisions which are based on underlying investment beliefs about how the investment world works.
"Investors will provide themselves with a solid foundation to make better quality decisions if they understand the role of beliefs in decision making, take the time to develop better quality beliefs and stick with those beliefs particularly in times of high pressure."
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