Hedge funds for retail investors? An examination of hedged mutual funds
| Jan 22nd, 2007 | Filed under: Academic Research, Hedge Fund Industry Trends | By: Alpha Male |
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By: Vikas Agarwal, Georgia State University; Nicole Boyson, Northeastern University; Narayan Naik, London Business School
Published: September 26, 2006
We have recently posted on a couple of stories regarding a new breed of “hedged” mutual funds that has emerged as US mutual fund regulators relax rules governing short-selling. In this well-timed research paper academics from the London Business School, Georgia State, Northeastern University in Boston crunch some numbers to get a handle on this phenomenon. They use data from Morningstar and Lipper (both of whom seem to be preparing for an arms race in hedge fund reporting).
They conclude a) that actual hedge funds outperform hedged mutual funds and b) that hedged mutual funds managed by actual hedge fund managers outperform those managed by traditional long-only managers. To explain these phenomenons, the authors propose three hypotheses…
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[...] usual protections associated with mutual funds, all would be well. But regular readers may recall this 2007 post about a paper by Vikas Agarwal, Nicole Boyson, and Narayan Naik that concluded “hedged mutual [...]