S&P: 130/30 Bull Run Still Has Some Legs

Hedge Funds Review reports that S&P is telling clients that 130/30 is a “strategy to watch in 2009” (no word on what to watch now or for the next six months - but it’s an ugly year anyway). 

Taking a page from Andrew Lo, co-author of the recent academic paper “130/30: The New Long-only“, S&P’s Srikant Dash told a London audience earlier this week that “Asset managers are moving into this area and eventually these funds will take a significant share from traditional active funds.”

This year may not be a bust though.  Referring to one particularly aggressive market estimate, another S&P official apparently said 2008 could also be shaping up to be a barn-burner:

I know of one analyst who predicted there would be $1.6 trillion by the end of 2008 linked to 130/30 funds.

According to Hedge Funds Review, S&P is launching two new 130/30 indices later this year.  This, after an S&P-authored research paper recently argued that the best benchmark for 130/30 funds is probably a long-only index (see related posting, read report).  Maybe that was a different “S&P” (?)