Strategic thinking
Banks and index providers have been quick to colonise the investment space vacated by stressed hedge funds after transparency became a byword for popularity. With both now offering proprietary dynamic strategies and promising alpha returns, will they end up competing for the same clients? Clare Dickinson reports
Dynamic strategies are index-based investment strategies that use algorithms to mirror the kind of complex methods commonly used by hedge funds. A common theme is the development of long/short strategies that contain a built-in risk or volatility control. The indexes they use are based on multiple asset classes, with equities being the most popular.
Banks have moved into the indexing space to meet their own needs. “One of the frustrations for banks is that index providers create these indexes
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