Mutual Fund Performance Persistence

Do high performing mutual funds continue to perform well? This is one of the biggest questions among both investors and researchers. Recently, the WSJ (see article here) studied how funds with five-star Morningstar ratings perform in the years following their high ratings. The results suggest that performance does not persist.

European Derivatives Market

The European Securities and Markets Authority (ESMA) just reported that the European derivatives market has an outstanding notional value of over 450 million euros, representing 33 million open positions. See article here, Luxembourg Post.

Shorting Treasuries

Investors have been expecting interest rates to rise. While this has yet to take place, more traders are taking positions consistent with this view. Potential budget deficits and borrowing costs are also adding to the situation. In response, many investors have reduced their exposure to long-dated Treasuries, as their higher duration would cause a more negative reaction to any increase in rates. Beyond that, other traders have taken increased short positions to benefit from this potential move. See article here, Reuters.