West Palm Beach (HedgeCo.net) – In an interview with Dan Dolan of Select Sector SPDRs on how the economic crunch is affecting trading rhythms, Dolan presented a broad overview of sector SPDRs and how more hedge funds and institutional investors are utilising the option of buying baskets of securities over single stock options.

Dolan developed and runs the Select Sector SPDR Trust, the ETFs which divide the S&P 500 into nine component sectors. With more than $27 billion in assets, the Trust is well into its 10th year of business.

"While most ETF providers continue to position their products as substitutes for traditional mutual funds, an attribute from which we also benefit, we’re seeing increased usage of Select Sector SPDRs as substitutes for equities, to reduce single stock exposure." Dolan said, "SPDR trading volume has averaged well over 200 million shares per day in 2008 as institutional investors take advantage of the outstanding liquidity to implement their trading strategies."

Sometimes considered speculative and volatile, sector investing has finally earned a place in many portfolios either as part of “core and explore” strategies, or as a way of betting on sectors about which investors feel especially bullish. Some investors have even diversified some of their mutual fund holdings to ETFs, opting for passive products, especially during market routs.

Dolan characterizes his products as the “new blue chips,” substitutes for large concentrated positions in widely-held stocks, and a way to provide investors with downside protection by avoiding headline risk. Select Sector SPDRs were the first sector family of ETFs and is the largest based on assets and trading volume.

Alex Akesson

Editor for HedgeCo.Net
Email: alex@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!

Tags: asset-management-services, boston, due-diligence-service, founding-partners, fund-groups, market-sentiment, prison-term, systems-developer

New York (HedgeCo.Net) – New York-based Avenue Capital, the hedge fund that manages roughly $20 billion, is back after a lagging first quarter.  The company informed investors that the fund experienced gains in May for the second straight month.

The firm’s $1.5 billion Avenue International Ltd Fund was up over 1.5% in May, while the $1 billion Avenue Europe International Ltd Fund and the $574 million Avenue Investments LP Fund followed suit and also posted gains.

Hedge funds are optimistic after experiencing losses stemming from last years credit crunch and subprime fallout.  Improved performance in credit markets as of late are making the future look bright for hedge funds.

The Avenue Capital Group was founded in 1995 and is headed by famed manager Marc Lasry.  The funds specialize in a long/short strategy while focuses on distressed and undervalued debt and equity opportunities.  The company recently raised $6.1 billion for “special situations” trading strategies.  

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com

Tags: 100-million, angela-merkel, april-29, brokerages, daughter-chelsea, dillard, dries, due-diligence-service, financial-distress, fund-groups, institutional-marketing, new-wave, repercussions, screws, trillion