Tail Risk Fund for Those Expecting a Crash
Maureen Farrell, of CNNMoney.com, writes about a fund that will skyrocket if the stock market collapses. Known as a “Tail Risk Fund,” it purchases cheap out of the money insurance that will provide exponential returns if equity indexes drop by 20% or more.
Universa Investments, whose adviser is Nassim Taleb, author of The Black Swan: Second Edition: The Impact of the Highly Improbable: With a new section: “On Robustness and Fragility”, is drawing money at a record rate so far this year.
In 2008, when the S&P 500 dropped nearly 40%, Universa generated returns of more than 115% for investors, according to a source familiar with the fund’s performance.
Universa expects returns of at least 60% when the market is down 20%.
Source: Yahoo Finance