Friday, 30 January 2015
Last updated 2 hours ago
Nov 3 2008 | 9:28am ET
By Christopher Holt -- The truth is out, hedge funds have long equity exposure. Our back-of-the-envelope analysis of the HFRI Index last week showed that all strategies—particularly “Equity Hedge”—had a positive correlation with equity markets.
So what can an investor seeking truly uncorrelated returns do about this? After all, it’s quite possible that a hedge fund could produce alpha, but deliver it to investors with a side helping of over-priced beta. Short bias managers, for example, are often said to produce a positive alpha even though they lose their shorts year after year. It is cases like this that make the term “absolute returns” a misnomer (see related post).
A new paper by the Edhec Risk and Asset Management Research Centre illustrates the ways that a fund of hedge funds can mitigate itself from these not-so-hidden factor exposures. Continue Reading on AllAboutAlpha.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…