Meanwhile on the Street…

The “systemic/technical investors” blamed by Mr Cooperman include so-called risk parity funds and momentum investors known as CTAs. Initially commodity-focused, these commodity trading advisers’ funds now invest across futures markets and are typically computer driven.

These investors, along with “smart beta” passive equity strategies that have become increasingly popular, adjust their exposures according to algorithms in response to market moves, and spikes in volatility can trigger a rash of automated selling.

-Henny Sender and Robin Wigglesworth ‘‘Risk parity’ shares blame for market ructions, says Omega‘ The Financial Times


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