Black Swan Funds Have a Moment as Investors Hedge Market Doom - Yahoo Finance
(Bloomberg) -- Black Swan funds spend years waiting for markets to crash. Turns out, just a whiff of a crash is enough to juice performance.
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These options-based strategies that benefit from volatility breakouts are having a great month while the S&P 500 is little changed in March, and widely owned bank shares have been battered, suggesting that a market-wide blowup would lead to big payouts. An actively managed exchange-traded tail-risk fund is up about 4% so far in March as banking turmoil deepens, on course for its second best month since March 2020 during the onset of the pandemic.
A modicum of calm returned to financial markets toward the end of the week, with stocks ending higher and the Cboe Volatility Index, Wall Street’s fear gauge, retreating. But investors remain on edge, as was apparent after a spike in the cost to protect against Deutsche Bank AG’s credit losses sent European bank shares into a tailspin. Policymakers from Washington to Frankfurt to Zurich continue to reassure investors about financial stability, even as confidence in a number of lenders wanes.
“The recent debacle has polarized defensive alternatives in a good way,” said Kris Sidial, co-chief...
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