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

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR