Execs: Mind-Boggling Derivatives Need Common Reporting

October 6, 2008

CHICAGO - When it comes to choosing derivative instruments, some portfolio managers still think the more complicated they are, the better. But as the stock markets become increasingly volatile and funds grapple with reducing risk to prevent further losses and investors heading to the exits, the voice of reason is growing. Mutual fund portfolio managers, once eager for alpha and hedge fund-like strategies, are beginning to pare back their holdings in derivatives, these incredibly complicated financial contracts that are so difficult to value and that many investment professionals don't understand.

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