Waddell & Reed and the May 6 “Flash Crash”
An October 6th story in The Wall Street Journal “The Mutual Fund in the Flash Crash” points to Waddell & Reed’s $27 Billion Asset Strategy Fund as a potential cause of May 6 “flash crash.” We ran a quick analysis of the fund with the findings outlined below. First, notable information from SEC filings (Q1 […]
An October 6th story in The Wall Street Journal “The Mutual Fund in the Flash Crash” points to Waddell & Reed’s $27 Billion Asset Strategy Fund as a potential cause of May 6 “flash crash.” We ran a quick analysis of the fund with the findings outlined below.
First, notable information from SEC filings (Q1 and Q2 2010)1: the fund is using equity futures and options to hedge. In addition, it is using currency options to make currency bets or hedge currency exposure. Also, it is invested in gold bullion.
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