WEST PALM BEACH, FL (HEDGECO.NET) – Hedge funds are here to stay according to Stephen van Eyk, the managing director of Van Eyk Research Company. According to him, despite all the discursion andnegative publicity, hedge funds continue to make their way into the realm of increasing number of trustees, individual investors, research houses, and into the radars of investment advisers.
According to Eyk, hedge funds have delivered absolute returns to its investors for the past three and half years. This period, according to him, is the second longest in history apart from the Great Depression, during which defensive investment portfolios have consecutively over performed growth portfolios.
The managing director of Eyk Research said, �With investors having gone through this period, it�s certainly increased investor appetite for more defensive assets, as they�re starting to think that this market behavior is normal and that equities are never going to go up again, so you�re seeing more interest in hedge funds, private equity and basically anything that isn�t associated with traditional liquid markets.�
Eyk said that there is no evidence that even when markets recover for a sustained period of time, that hedge fund investors will desert hedge funds. Eyk added, �I don�t think markets are going to do so well that people will abandon hedge funds, as they offer diversification and provide a portfolio with lower volatility, or Sharpe ratio.�
Eyk maintained that hedge funds would always have a place in investment portfolios. For one thing, their role for portfolio diversification will always be in demand, but he also thinks that with time, the rate at which they attract assets will ultimately slow down.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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