Extreme sport isn’t the only venue for thrill seekers and adrenaline junkies, judging from the recent returns racked up by so-called “black swan” funds. The funds, named after the generic term for an unexpected event that negatively or positively impacts the market, take advantage of the resulting volatility.
“Investors are pouring into doomsday black swan funds, spurred by the spreading European debt debacle and Standard & Poor’s downgrade of U.S. creditworthiness,” Bloomberg reports. “The funds entice investors with the possibility of a huge payoff if a crisis hits.”
The news service notes one of the largest funds, Universa Investments based in Santa Monica, Calif., returned about 115% to investors in 2008. Through August, the fund is up 23% for the year.