We share a bi-weekly snapshot of the latest news in alternative investments.
Recently there has been a rise in the number of activist hedge funds, raising a question of whether they will become a greater force in the investment industry. Asset inflow has been spectacular over the past 20 years, with more shops proliferating and large institutions taking an increased interest in recent years. Additionally, activist fund performances were stellar in 2015, presenting great future potential for enhanced returns.
So should you invest alongside activist funds? There are many different ways to mimic their strategies. Many times the manager will file public reports on securities ownership and investors can take a peek into their portfolio positions. There’s even a mutual fund that tracks the filings and invest in the stocks that the activists have invested in. However, for obvious reasons, blindly trailing their positions might not yield positive results.
A superior way to take advantage of this rising activism is to directly invest with them. By investing with the managers, investors can benefit from alpha generation to the fullest degree. Certainly, activist funds are not free from faults, but investors can perform additional due diligence by utilizing the SEC EDGAR website and reading 13D and 13F reports. If you love following and analyzing stocks, this may be a good way to broaden your scope and diversify some investments into alternatives.
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