Browsing: Retail Investing

Retail Investing

Capture this: A simple, but useful tool for describing hedge fund returns

Dec 6th, 2010 | Filed under: Retail Investing

The hedge fund industry has an occasional obsession with exotic risk metrics (VaR, Conditional VaR, Omega Ratio, higher moments, etc.).  These make a lot of sense if you have a few Ph.D.’s on staff (read: you’re a large institutional investor).  But what if you need to explain the non-market-tracking natureRead More

Closet indexing continues to flourish in mutual fund land (and bring down average performance)

Nov 29th, 2010 | Filed under: Retail Investing

Mutual funds with a high "active share" are once again found to produce higher and more persistent returns - the two basic constituents of alpha. So why is closet indexing as popular as ever? And what does this portend for hedge funds?Read More

SEC: When is a Family Office not a Family Office?

Oct 24th, 2010 | Filed under: Retail Investing

The Dodd-Frank Act requires hedge fund to register with the SEC. But it also nearly also forced America's 4,000 family offices to do the same. That got the SEC is wondering: What exactly is a family office anyway? Read More

Homogenized hedge funds

Oct 13th, 2010 | Filed under: Retail Investing

Despite a lot of chatter and an assortment of industry surveys, some still say there hasn't yet been a "comprehensive overview of the differences and similarities of alternative UCITS funds and hedge funds" - until now...Read More

Mutual fund study finds “first direct evidence of trade off between performance and marketing”

Aug 24th, 2010 | Filed under: Retail Investing

Mutual funds have learned that holding stock market "darlings" is bad for performance, but good for marketing. Thankfully for hedge funds, less transparency may have allowed them to avoid this trap. Read More

Despite performance concerns, UCITS-compliant hedge funds still have plenty of fans

Aug 18th, 2010 | Filed under: Hedge Fund Industry Trends, Retail Investing, UCITs

A recent survey finds that UCITS-compliant hedge funds are still drawing crowds - despite a few rough edges here and there.Read More

Being short apparently has its benefits

May 10th, 2010 | Filed under: Retail Investing, 130/30

A new research paper suggests mutual funds that adopt hedge fund-like strategies were aided by their short positions - especially during the financial crisis.Read More

Examining “Real Alpha” and “Exotic Beta” in mutual funds

Feb 1st, 2010 | Filed under: CAPM / Alpha Theory, Retail Investing

Usually the term "exotic beta" is associated with hedge funds. Finally, it's being applied to the largest pool of active management - mutual funds. Read More

UCITS and NEWCITS and Hedge Funds, oh my…

Jan 19th, 2010 | Filed under: Hedge Fund Regulation, Retail Investing, UCITs

The expected EU Directive in addition to generally more heightened demand for regulatory compliant alternative investments has already set in motion a wave of so-called UCITS- and NEWCITS-based funds. The question is whether they can truly live up to expectations, particularly with higher costs and lower returns?Read More

A January Tradition: Investors’ love/hate relationship with hedge funds.

Jan 4th, 2010 | Filed under: Retail Investing, Alternative Beta & Hedge Fund Replication

As investors reflect on last year, they are apparently of two minds regarding hedge funds.Read More

The grass is always greener… mutual fund managers’ walk on the wild side not so wild after all.

Dec 21st, 2009 | Filed under: Retail Investing

The allure of making big money and being your own boss was plenty to lure many a mutual fund manager to the hedge fund world. The reality, according to a new study published last month, is that there was almost no way to obtain the same level of compensation or better. Read More

Equity long/short mutual funds “could easily grow twenty-fold over the next five years:” Report

Nov 9th, 2009 | Filed under: Retail Investing

Are "hedged mutual funds" finally ready for prime time? Read More

Report shows that some wounds recently suffered by wealth managers may have been self-inflicted

Jul 30th, 2009 | Filed under: Retail Investing, Institutional Investing

A recent report by Capgemini and Merrill Lynch show that wealth managers may have stopped listening to clients at exactly the wrong moment.Read More

Research shows private bankers still favour hedge funds. Managers not convinced though

Jul 29th, 2009 | Filed under: Hedge Fund Industry Trends, Retail Investing

Two different surveys paint a picture of concerned hedge fund managers - even though private bankers see continuing value in their craft.Read More

Hedge funds & mutual funds: “resistance” and “turf wars” or just eloping in Vegas

May 26th, 2009 | Filed under: Retail Investing

Convergence can apparently be a very messy thing. Read More

The new look for hedge funds this summer: mutual funds

May 6th, 2009 | Filed under: Retail Investing

Hedge funds are on an AUM diet these days. But have investor redemptions been a result of the underlying investment strategies used by hedge funds or the result of the fund structures themselves? Read More

Two studies find active management “put” was AWOL in 2008

Apr 22nd, 2009 | Filed under: Retail Investing

Many say that the ability to dial back on beta is the hallmark of active management. But some recent research finds that this flexibility hasn't paid off when needed most.Read More

New Putnam funds separate alpha and beta (nearly)

Oct 6th, 2008 | Filed under: Retail Investing

Too little, too late? Putnam swims against the current with a new fund that contains a sort of "hidden hedge fund" inside it.Read More

Hedge Funds and Mutual Funds: Not such an odd couple – as long as conflicts of interest are managed

Sep 24th, 2008 | Filed under: Retail Investing

With the world of hedge funds and traditional long-only funds hurtling into each other, we examine some of the conflicts of interest and performance implications of hedge funds and mutual funds co-habitating.Read More

Are financial advisors serving your lunch to hedge funds?

Aug 24th, 2008 | Filed under: Retail Investing

An upcoming article in the Journal of Investing questions the value of non-fee-based financial advisors.Read More

What’s behind the drop in mutual fund alpha?

Aug 13th, 2008 | Filed under: CAPM / Alpha Theory, Retail Investing

Like hedge funds, mutual funds are finding true alpha harder to come by. But you might be surprised to learn who is to blame.Read More

UMAs: Base Camp for Wealth Managers to Scale Mt. Alpha

Jan 10th, 2007 | Filed under: Retail Investing

“SMAs grow up and learn to play nicely in the advisory community” By: Janet Aschkenasy, Wealth Manager Magazine Published: January 1, 2007 While institutional investors have been busy debating the merits of bifurcating alpha and beta, the wealth management industry has inadvertently stumbled upon an enabling technology that may somedayRead More

Mutual Funds: Obsolete?

Dec 20th, 2006 | Filed under: Retail Investing

By: Jonathan Chevreau, National Post (Canada) Published: December 20, 2006 Jonathan Chevreau is a highly regarded and well-known business columnist in the Great White North.  In today’s National Post, he picks up on Chet Currier’s musings about the possible “End” of mutual funds.  Although Chevreau is a critic of Canada’sRead More

Note to Bloomberg: Chet Currier is a very smart man.

Dec 19th, 2006 | Filed under: Portable Alpha & Alpha/Beta Separation, Retail Investing

Kudos to Bloomberg’s Chet Currier for shining the spotlight on alpha-centric investing today (“Does Alpha-Beta Spell “The End” for Mutual Funds?“).  Reports Currier: “The very model of a mutual fund is indeed outmoded, argues a large and growing group of financial researchers and professional money managers who are busy describing,Read More

Alpha-Centric Investing: Not Just for Institutions Anymore

Dec 16th, 2006 | Filed under: Retail Investing

Event: Bringing Academic Insights to Wealth Management and Investment Management Dates: March 13-14, 2007 Location: Geneva Organized by: EDHEC Risk and Asset Management Research Centre For those who don’t believe new asset management techniques such as ALM, portable alpha, and hedge funds have any role in private investors’ portfolios, checkRead More

ETFs and Hedge Funds: Separated at Birth

Nov 9th, 2006 | Filed under: Portable Alpha & Alpha/Beta Separation, Retail Investing

When mutual funds can be cloned using a combination of ETFs and hedge funds, it’s no surprise that both sectors seem to be growing in tandem.                Experts have been trying to reconcile these seemingly contradictory trends.  Are we giving up on active management or embracing it?  Do we wantRead More

Fidelity Practically a “No Show” in ETF Arena

Oct 23rd, 2006 | Filed under: Portable Alpha & Alpha/Beta Separation, Retail Investing

By: David Hoffman, Investment News Published: October 23, 2006 Smaller events on the PGA and ATP Tours always have a problem attracting the big names.  Take, for example, the Canadian stop on the ATP Tour.  It seems that every year the top players fall victim to some freak injury right before theRead More

ETFs and SMAs: Side By Side

Sep 14th, 2006 | Filed under: Retail Investing

By: Sydney Leblanc, Financial Advisor Magazine Published: August 1, 2005 This article for advisors covers ETFs in general.  However, the author makes an interesting observation about the role of ETFs in an SMA for purposes of hedging market risk and essentially creating portable alpha. “ETFs can also be used asRead More

ETFs: An Advanced Alternative to Indexation

Aug 28th, 2006 | Filed under: Retail Investing

By: Yang Rong Published: March 6, 2006 Yang Rong’s observations about ETFs support their use as an alpha-isolation tool by hedge fund managers.  Which begs the question, “why just hedge funds?”. Excerpts:  “ETFs are often used for shorting purposes due to their intra-day trading rules, which not only help hedge funds toRead More

Trends in Exotic ETFs

Aug 28th, 2006 | Filed under: Retail Investing

By: Yang Rong Published: February 20, 2006 The explosion of the ETF industry now provides many more tools for alpha extraction and porting…  Excerpts: “Commodity ETFs: Commodities in general are typically a good hedge against inflation and stocks over a sustained period. The value of commodity ETFs is tied directly to theRead More

Mutual Funds: The Good, The Bad and the Ugly…

Aug 28th, 2006 | Filed under: Retail Investing

By: Noel Amenc, Edhec Business School Published: April 14, 2006   Professor Noel Amenc of the Edhec Business School in France argues for a new way of measuring mutual funds based on alpha/beta seperation (a topic regularly promoted on this website). Excerpts: “With the development of independent distribution and so-calledRead More

How to Build Your Own Hedge Fund

Jul 14th, 2006 | Filed under: Retail Investing

By: Lewis Braham, Business Week Published: December 26, 2005 This ariticle in Business Week illustrates clearly how hedging techniques can and will be used by individual investors in their own portfolios and it builds on many of the ideas contained in a post on this blog called “Financial Genomics”.  Excepts: “Using mutual funds,Read More

Comparing Position-Level and Regression-Based Techniques for Isolating the “Embedded Hedge Fund” in an Active Mutual Fund

Jul 13th, 2006 | Filed under: Performance, Analytics & Metrics, Retail Investing

By: Alpha Male  Shorting out the equity market can isolate what I call the embedded hedge fund from within a long-only mutual fund.  As many, including William Sharpe, have argued, you don’t need to know the actual holdings in a mutual fund to determine the amount of beta within it. Read More

Disintermedation of the Mutual Fund Foretold by Nobel Winner

Jul 13th, 2006 | Filed under: Portable Alpha & Alpha/Beta Separation, Hedge Fund Industry Trends, Retail Investing

By: Alpha Male  In the 1930’s, a commerce student at the London School of Economics named Ronald Coase traveled throughout the United States conducting research for a research paper he called The Nature of Firm.  In 1991, he won the Nobel Prize for Economics for this and similar studies.  InRead More

Synthetic Replication of a Mutual Fund Using “Off-the-Shelf” Alpha, Beta, and Leverage

Jul 6th, 2006 | Filed under: Portable Alpha & Alpha/Beta Separation, Retail Investing

By: Alpha Male  A friend recently asked me to analyze his firm’s equity mutual fund on the basis of it’s alpha component.  What proportion of the fund could be represented by an ETF, by cash (or borrowed cash), and by a market neutral overlay (a.k.a. “the embedded hedge fund”)?  IfRead More

Investing Like the Pros: Combining Index Funds with Alternative Strategies

Jul 4th, 2006 | Filed under: Portable Alpha & Alpha/Beta Separation, Retail Investing

By: Jonathan Clements, Wall Street Journal Published: February 8, 2006 Excerpt: If you’re like many mutual-fund investors, you own a mix of actively managed stock funds that tap into a host of market sectors. And, of course, you hope to beat the market. “Problem is, a lot of what you’reRead More

Defending an ETF Portfolio

Jul 4th, 2006 | Filed under: Retail Investing

By: Richard Kang, Meridian Global Investors Published: January 2005 Excerpts: The combination of the long position in the small cap fund and the short position in the Russell 2000 (assuming roughly equal dollar amounts) looks a lot like a market neutral long-short position, one subset of hedge funds. Only recently,Read More