Hedge fund indices, Financial Management

Assignment Help:

Hedge Fund Indices

Substantial increase in the use of Hedge Funds in recent times has created demand for appropriate indices that can offer a good tool to assess and benchmark the Fund performance. This can be seen from where in returns of various hedge fund strategies from 2003-2006 are shown. Currently, popular Hedge Fund indices include Hedge Fund Research (HFR) and EACM (Evaluation Associates Capital Management). Generally, Hedge Fund indices are constructed to show a Hedge Fund's performance by the investment style. Some industry observers also believe that the return generated by Fund of Hedge Funds is often taken as the overall industry performance.

Hedge Funds are consistent performers and are posting double digit returns for the last ten years. Between 1994 and 2005, US shares produced an average annual return of 10.6 percent, just outpaced by hedge funds, which according to Credit Suisse/Tremont, produced an 11 percent average annual return. Therefore, an investor can add significant value to his portfolio by including a Hedge Fund through the systematic implementation of active style allocation decisions which can add alpha to his overall portfolio returns (above average return from particular benchmark).


Related Discussions:- Hedge fund indices

Working capital mini qs, Q. Working capital mini Qs? During January 20X...

Q. Working capital mini Qs? During January 20X4, Gazza Ltd made credit sales of £30,000 that have a 25% mark up. It also purchased £20,000 of inventories on credit. Calculat

calculate the value of the bond, a.) A bond of Rs. 1000 value carries a co...

a.) A bond of Rs. 1000 value carries a coupon rate of 10% and has a maturity period of 6 years. Interest is payable semi-annually. If the required rate of return is 12%, calculate

Explain how using a risk-adjusted discount rate, Explain how using a risk-a...

Explain how using a risk-adjusted discount rate improves capital budgeting decision making compared to using a single discount rate for all projects? The risk-adjusted discount

Exchange Rate Parity Conditions, 1) According to the IFE (RIP), if U.S. inv...

1) According to the IFE (RIP), if U.S. investors expect a 3% rate of domestic inflation over one year, and a 6% rate of inflation in European countries that use the EUR, and requir

Explain accept-reject criteria, Q. Explain Accept-Reject Criteria? Acce...

Q. Explain Accept-Reject Criteria? Accept-Reject Criteria:- If actual ARR is elevated than the predetermined rate of return .......................Project would be accep

International bonds, International bonds are divided into two c...

International bonds are divided into two categories namely, foreign bonds and euro bonds. Foreign bonds are issued by a borrowing company in another

Show the compound value of the single flow, Q. Show the Compound Value of t...

Q. Show the Compound Value of the Single Flow ? Compound Value of the Single Flow (Lump Sum):- The process of computing future value becomes very cumbersome if they have to be

Explain the implicit cost of capital, Explain the Implicit cost of capital ...

Explain the Implicit cost of capital Implicit cost of capital can be defined as the rate of return associated with the best investment opportunity for the firm and its Shareho

Determine the term- profit before taxation and interest, Determine the term...

Determine the term- Profit before taxation and interest Profit before taxation and interest can also be used here in addition to profit for the period. Whichever figure is tak

What are implications of ownership rights by equity claims, What are the ma...

What are the main implications of ownership rights by equity claims? Ownership rights have two primary implications: a. First, equity holders can advantage by any raise in t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd