Tuesday, December 9, 2014
Chasing Winners: The Appeal and the Risk
By Kristofer Kwait, Managing Director, Head of Hedge Fund Research and John Delano, Director at Commonfund Hedge Fund Strategies Group
For the large majority of hedge fund investors, frequent and repeated manager turnover is neither a practical nor desirable approach to managing a hedge fund portfolio. However, experiments simulating such an approach can be useful in that they can illustrate potential long-term consequences of different selection strategies. In their paper, the authors present results of one such experiment that offer a strong caution against the practice of chasing winners, or hiring managers that have had the highest returns.
Download the full article here.
From the December 2014 issue of Barclay's Insider Report. Accredited investors can subscribe to the full newsletter for free.
For the large majority of hedge fund investors, frequent and repeated manager turnover is neither a practical nor desirable approach to managing a hedge fund portfolio. However, experiments simulating such an approach can be useful in that they can illustrate potential long-term consequences of different selection strategies. In their paper, the authors present results of one such experiment that offer a strong caution against the practice of chasing winners, or hiring managers that have had the highest returns.
Download the full article here.
From the December 2014 issue of Barclay's Insider Report. Accredited investors can subscribe to the full newsletter for free.
Labels: Barclay Insider Report, Barclay Insider Report Guest Article, hedge fund managers, hedge fund performance, hedge fund portfolio
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