Andrew Schneider, president and CEO of Global Hedge Fund Advisors, pointed out that some large hedge funds took a severe beating as a result of the volatile market movements during the first half of September and after the sell-off in equities and the wild fluctuations in the currency markets in August.
“The volatility has been so high; if you’re wrong, especially if you’re using margin or leverage, your returns are going to be extremely poor,” Schneider remarked.
ETF fund providers also offer products based on so-called fundamental indices that utilize quantitative and qualitative methodologies in an attempt to outperform other benchmarks. Invesco PowerShares is one of the more prolific providers of fundamentally weighted ETFs.
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.