Goldman Strategist Sees ‘Very, Very Small Sand Box’ For Stock Hedge Funds

May 30 2014 | 9:38am ET

A top Goldman Sachs strategist is anything but bullish on hedge funds this year.

David Kostin, the bank’s chief equity strategist, said there are too few opportunities out there for the industry to do well. Citing consumer-discretionary stocks, which make up about a quarter of equity hedge funds’ portfolio, Kostin said the dispersion of returns is too small to permit successful long/short trading.

“The opportunity set, the sand box, the swimming pool is very, very small,” he told Bloomberg Television. “It’s been a very difficult year from a stock-selection perspective.”

The troubles are forcing hedge funds to abandon what Kostin called “glamour stocks” in favor of a value-investing approach.


In Depth

Q&A: MackeyRMS's Chris Mackey On A High Tech Fix To Broker Votes

Jun 23 2017 | 8:17pm ET

The looming implementation of the EU’s MiFID II rules regarding research has put...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: Asia-Focused Hedge Funds Offer Great Opportunities

Jun 23 2017 | 3:33pm ET

Emerging market strategies have outperformed their developed-market peers for five...

 
Error

From the current issue of