Top Hedge-Fund Index Trading Strategy Is So Popular It May Be Falling Apart - Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world Americas+1 212 318 2000 EMEA+44 20 7330 7500 Asia Pacific+65 6212 1000 Ishan Translate Listen 5:02 One of the most reliable strategies in the hedge-fund world this century is also one of the simplest: Buy stocks that are entering major indexes and sell those that are exiting them. For Emmanuel Terraz, it has minted profits practically his whole career. But something is changing, and the Frenchman’s Candriam Index Arbitrage fund — which has gained in all but four of its 19 years, including through the financial crisis and Covid — posted its worst-ever performance in 2022. The Paris-based investor’s diagnosis: With everyone from Millennium Management to Man Group now pursuing it, the strategy that exploits the rise of passive funds and their robotic, easy-to-predict investing decisions has become

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world Americas+1 212 318 2000 EMEA+44 20 7330 7500 Asia Pacific+65 6212 1000 Ishan Translate Listen 5:02 One of the most reliable strategies in the hedge-fund world this century is also one of the simplest: Buy stocks that are entering major indexes and sell those that are exiting them. For Emmanuel Terraz, it has minted profits practically his whole career. But something is changing, and the Frenchman’s Cand