Leverage Increases For First Time In '12

Oct 8 2012 | 12:09pm ET

Hedge funds are levering up for the first time this year.

Margin debt on the New York Stock Exchange rose 5.4% year-on-year in August, according to Bank of America Merrill Lynch. That benchmark for leverage has dropped for nine straight months.

"Leverage can be used as a sentiment indicator as it is related to investor confidence," BofA, which tracks the use of leverage among investors, including hedge funds, said. "It tends to be correlated to the direction of the equity market—investors are likely to gain confidence and add leverage when the equity market is going up and vice-versa. The current reading shows that investors are becoming more confident in the market, which supports further upside."

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...