Saturday, 20 September 2014
Last updated 15 hours ago
Nov 21 2011 | 12:03pm ET
Morgan Stanley strategist Adam Parker says hedge funds are not producing the “alpha”—returns above and beyond what the market is generating—they promise.
Parker’s research, as reported in the Wall Street Journal, shows the correlation between hedge fund returns and the S&P 500 has risen to nearly 100% in recent years. Worse still, where there is a gap between hedge fund returns and pure market returns, it might not be in investors’ favor—the annualized excess hedge-fund return for the past five years has turned negative.
Parker says the current, highly correlated market makes it difficult to pick stocks well, which inhibits the alpha-generating abilities of many hedge funds. Moreover, some funds have produced outsized returns, the WSJ says the averages are “no doubt being dragged down by the truly horrible hedge funds out there.”
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.