Fund performance

The firm expects a second wave of opportunities, particularly in commercial mortgage-backed securities and collateralized loan obligations.

The poor showing may lead investors to question why they’re paying some of the highest fees in the money management industry.

CEO Larry Fink announced a new focus on ESG in January, however the coronavirus has pushed a separate set of urgent issues into the forefront.

“People are just saying, ‘Why should I pay for an active manager when most of them lose to the benchmark anyway?’ This is a big deal,” an expert says.

“I do believe that clients sometimes get too caught up in expense ratios,” an expert says.

“This market environment is a very good one for investors to do a self-awareness check,” an expert says.

Instead, the billionaire opted for a lucrative credit hedge that earned his firm about $2.6 billion in profits when the market plummeted.

“Ideally, you would like clients to try not to make really short-term decisions, however this is an unprecedented situation,” an expert says.

Flagship funds at Ken Griffin's firm had been down 5.3% through March 20 before things turned around.

The funds are also some of the lowest-duration products in the market.

Sales people are having a hard time marketing new products in isolation, one executive says.

The major issuers of leveraged products, which trade under the ProShares and Direxion trademarks, have each posted inflows of over $2.8 billion this month.

“Recent further Fed action from COVID-19 seems to put another layer on a near-40-year bond bull market,” an expert says.

After becoming unmoored in recent weeks as bond market liquidity dried up, funds that stand to benefit from the central bank’s buying are now rallying.

Five of the top seven performers this year carry AA ratings.

The firm had received margin calls from counterparties including BNP Paribas after its trades went awry, people familiar with the matter said.

Funds with higher risk profiles — high-yield and emerging markets — are now paying the price.

With more than $80 billion in combined assets under management, the winners have started out the year with a loss.

The bank says it has decided to “effectively eliminate the net leverage” of its MLP Income Opportunities Fund and MLP and Energy Renaissance Fund.

Fund managers may be better equipped to weather the market storm than their passive peers because of their ability to quickly cut risk.