Measuring Hedge Fund Timing Ability across Factors

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CFA Digest
May 2012 | Vol. 42 | No. 2 | 2 pages
Source: CFA Institute
Ludwig B. Chincarini, CFA Alex Nakao
Derek W. Johnson, CFA (Reviewer)

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Abstract

Traditional measures of market timing for hedge funds are inadequate. Hedge funds are more complex than mutual funds and often specialize in very different strategies. The authors measure hedge funds’ ability to time various factors and find that hedge funds are successful in timing these factors but do not show persistence unless they are in the top or bottom quartiles.

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Topics
Alternative Investments
    :
  • Hedge Funds
|
Performance Measurement and Evaluation
    :
  • Performance Attribution
|
Portfolio Management
    :
  • Alternative Investment Portfolio Management Strategies
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