AN INVESTOR in some of Scottish Widows’ investment funds has been engaging in the questionable trading practice known as market timing, according to industry sources.<\/p>\n
Pentagon Capital Management, a London-based hedge fund, allegedly engaged in the practice about a year ago as it made deals in some of the Edinburgh life assurer’s OEICs, the insiders have claimed.<\/p>\n
The process is based on institutions buying and selling funds after the market has closed, responding to news that is likely to affect their price when trade re-opens. The practice takes advantage of the fact that funds are only priced once per day.<\/p>\n
Although market timing is not illegal, it can reduce gains for long-term investors. Investment firms are obliged to have sufficient measures in place to know if their funds have been subject to the practice.<\/p>\n
A major investigation into the practice in the US has drawn in about two dozen companies, and has uncovered evidence of collusion between fund managers and investors.<\/p>\n
Scottish Widows said it is “sometimes approached by institutional investors looking to place large investments (or a series of investments) in our OEICs.<\/p>\n
“We transact this business in accordance with the terms and restrictions of the scheme documentation and FSA rules.”<\/p>\n
A spokesman for Pentagon said that it “recently commissioned a voluntary, independent review of [our] trading activities.<\/p>\n
“The results… were sent to the FSA as a matter of course.”<\/p>\n","protected":false},"excerpt":{"rendered":"
AN INVESTOR in some of Scottish Widows’ investment funds has been engaging in the questionable trading practice known as market timing, according to industry sources. Pentagon Capital Management, a London-based hedge fund, allegedly engaged in the practice about a year […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1983","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/1983","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=1983"}],"version-history":[{"count":0,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/1983\/revisions"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=1983"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=1983"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=1983"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}