Loading ...what’s the point of hedging when central banks will not allow any sustained drop?
In other words, if something eventually does happen to the FAAMGs – and Goldman is on the record warning that sooner or later there will be a painful repricing of these stocks that now account for 21% of the S&P’s market cap – the entire hedge fund industry will blow up.
And speaking of hedge fund performance, it will come as a shock to nobody that according to the HFR equity hedge fund index, the S&P500 and the broadest tracker of equity hedge fund performance are virtually neck and neck YTD, with the one highlight that one doesn’t pay 2 and 20 to buy the SPY, which as we have repeatedly pointed out over the years, is now explicitly micromanaged by the Federal Reserve itself, once again begging the question: what’s the point of hedging when central banks will not allow any sustained drop?
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