Premium: Black Swan funds have a moment as investors hedge market doom

Black Swan funds spend years waiting for markets to crash - and just a whiff of investors hedging market doom is enough to juice performance.
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By Denitsa Tsekova

Black Swan funds spend years waiting for markets to crash. Turns out, just a whiff of a crash is enough to juice performance.

These options-based strategies that benefit from volatility breakouts are having a great month while the S&P 500 is little changed in March, and widely owned bank shares have been battered, suggesting that a market-wide blowup would lead to big payouts. An actively managed exchange-traded tail-risk fund is up about 4% so far in March as banking turmoil deepens, on course for its second best month since March 2020 during the onset of the pandemic. 

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