Summary
Stonebrook Capital Management is launching a proprietary hedging program targeted to funds of funds, aiming to reduce risk and improve returns during times when diverse strategies may begin to correlate. The program has produced strong pro forma results. Applied to one fund of funds last August, the strategy would have improved the funds' performance from -0.26% to 1.6%, says Jerome Abernathy, chief investment officer for Stonebrook. When the strategy detects the markets entering risky territory it does two things: purchases "flight to quality" type instruments in the form of US Treasuries and sells small cap and emerging stock indexes.
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Hedge Your Hedge Fund
During the course of the subprime debt crisis that began last summer, we have heard on a number of occasions that this bank or that ban...
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