Understanding hedge fund performance better

Mon Jun 9, 2014


It is all too common today for comparisons between aggregated hedge fund indices and equity indices like the S&P 500 to be made


By Jack Inglis, CEO, AIMA

 
  Jack Inglis
It is a debate possibly as old as the hedge fund industry itself. Investors, commentators and the media have long mulled over how to understand hedge fund performance and compare it to other investments. But since the financial crisis, and the quantitative easing-fuelled boom in public equity markets that followed it, these debates have intensified.

It is all too common today for comparisons between aggregated hedge fund indices and equity indices like the S&P 500 to be made. For example, a set of monthly hedge fund index figures is often compared to the S&P 500 in that period with the latter used as a proxy for the 'market’, with the difference between the two interpreted as hedge funds either under-performing or over-performing 'the market’.

This of course is not the way most institutional hedge fund investors or funds of hedge...

ISSN: 2151-1845 / CDC10004H

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