Why Hedge Funds Did Poorly in 2011
Much has been said about the poor performance of hedge funds in 2011. Here’s why we don’t believe this undermines the case for hedge funds. The HFRI Fund of Funds Composite Index, the most commonly...
View ArticleAllocating to Hedge Funds Should Be a Two-Step Process
The experience of two bear markets in the past decade reminded investors of the importance of diversification. This, coupled no doubt with some envy of the “endowment model” of the likes of Yale and...
View ArticleHedge Funds: Separating Fact from Hype
It’s easy to understand the allure of hedge funds—and the fear they inspire. After conducting rigorous research aimed at separating fact from hype, we have concluded that hedge funds historically have...
View ArticleRooting Out Biases in Hedge-Fund Data
In a recent article, I discussed the conclusions about hedge fund’s historical returns and risk we reached after rooting out biases in the data available. Here’s how we sought to eliminate those...
View ArticleHedge Funds: Identifying Alpha and Mitigating Risk
Hedge funds have historically generated higher returns than stocks with less volatility, but they also pose several significant risks that volatility alone doesn’t capture, our research suggests. That...
View ArticleHow Much Hedge Fund Exposure Makes Sense?
Our research suggests that a well-diversified allocation to hedge funds might improve portfolio returns, but their greatest benefit is the risk reduction that comes from their low correlation to...
View ArticleIs It Time to Get Back into Stocks—or Too Late?
After five years of fleeing stocks for the perceived safety of bonds, US mutual fund investors became net buyers of stock funds in January. While some see the return of the retail investor as a...
View ArticleReducing the Risk from Adding Stock Exposure
Adding other sources of diversification could significantly reduce the risk from increasing stock exposure, our research suggests. As I explained in a recent article, we think many investors with...
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