High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our T&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. https://www.ft.com/content/3eba3f56-08c6-11e7-97d1-5e720a26771b Popularity of trend-following funds — and their promises — carries echoes for some of 1987 crash Read next Teza sells high-speed trading as business sours 2 hours ago There is a concern that if taken to extremes, allocations to commodity trading advisors hedge funds could play the same role as portfolio insurance did in the 1987 Black Monday crash, pictured above © AFP Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 6 Print this page yesterday by: Robin Wigglesworth in New York On Wall Street, bad ideas rarely die. They often go into hibernation until resurrected in a new form. And portfolio insurance — a leading contributor to the 1987 “Black Monday” crash — is, for some, making a return to markets. Sample the FT’s top stories for a week You select the topic, we deliver the news. Select topic Enter email address Invalid email By signing up you confirm that you have read and agree to the terms and conditions, cookie policy and privacy policy. Institutional investors are allocating billions of dollars to “risk mitigation” or “crisis risk offset” programmes that are designed to act as a counterweight when markets are in turmoil. They mostly comprise long-maturity government bonds and trend-following hedge funds, which tend to do well when equities plummet. But some analysts and fund managers worry that if taken to extremes, allocations to trend-following “commodity trading advisors” hedge funds, in particular, could play the same role as an investment concept called portfolio insurance did in 1987, when it was blamed for aggravating the worst US stock market collapse in history. https://www.ft.com/content/3eba3f56-08c6-11e7-97d1-5e720a26771b