The rush into online brokerage trading continues, with trendy stocks like Pfizer, Tesla, Nikola, and Snap being added to tens of thousands of Robinhood user accounts over the last week (according to Robintrack.net), and E-Trade adding over 320,000 new accounts in each of the first two quarters of 2020.

My name is Alyx Flournoy and I’m thrilled to join the Omega Point family as the Head of Product Specialists. For my first foray into Factor Spotlight, I’ll be continuing from last week’s look at the long-short hedge fund existential crisis by focusing on a dataset that is rising in popularity as an indicator of Retail Investor Sentiment. If you’ve noticed some unusual behavior in your long-short portfolios, it’s possible that market moving retail flows may be the culprit.

Following a brief Independence Day hiatus, we resume Factor Spotlight this week in the wake of the article published by Bloomberg this past Wednesday titled “The Hottest Hedge-Fund Strategy Faces an Existential Crisis”. This article posits that equity long-short strategies are no longer working and supports a conclusion that forecasts rough goings for the world’s most popular hedge fund strategy by pointing to weak performance, increased investment outflows, and fund closures since 2019 that have accelerated as COVID has impacted the markets.

Over the past 3 weeks we’ve focused on the Social components of OWL Analytics’ ESG composite datasets, including an analysis of historical trends in “Human Rights” and “Employee Diversity & Rights” factors. We have been able to uncover some promising evidence that companies ranked high on social factors also exhibited stronger performance historically. As we had discussed in the kick-off issue of our series, we believe that the investment community is in an especially unique position to enact change by choosing where we deploy our capital.