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Hedge Fund Strategies: Top Papers of 2018

  • Posted by: ,  Chief Executive
  • 12 September 2018
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The best Hedge Fund white papers from around the world

The CFA Institute Research Foundation's 183-page 'primer' on the alternative investment industry contains a wealth of information on hedge funds, from typical structures to individual strategies and management practices.

Delve into this year's list of top hedge fund papers for surveys from fund managers, suggestions on evaluating individual hedge funds, and theoretical questions about the EMH, the utility of specific strategies, and the nature of alpha generation.

hedge fund strategies 2018

Is Your Absolute Return Strategy the Right Fit? (Intech Investments, Aug 2018) 
(For compliance reasons, this paper is only accessible in certain geographies)
Intech Investments introduces a simple framework for evaluating the diversification benefits of absolute return strategies. These strategies strive for lower correlations and positive returns with greater downside protection. 

Alternative Investments: A Primer for Investment Professionals (CFA Institute Research Foundation, 2018)
This paper reviews the alternative investment landscape, along with the particular challenges and characteristics of alternative assets for the benefit of portfolio managers and institutional asset allocators.

2018 Hedge Fund Institutional Investor Survey (JP Morgan)
This is J.P.Morgan's 15th annual Hedge Fund Institutional Investor Survey, with responses from over 250 global investors.  The survey aims to assist hedge fund managers and investors in understanding industry trends.

Combining Investment Signals in Long/Short Strategies (Goldman Sachs AM, 2018)
How should investment signals be combined within long/short portfolios? Should the signals be weighted first and then combined, or the other way around? This paper explores the implications for fund managers of each approach.

If We Don't Believe Markets are "Efficient", What Do We Believe? (Winton, 2018)
The efficient market hypothesis may not accurately encapsulate real-world investor behaviour. Winton presents an alternative theory of ecological origin that may capture some of the elements that the EMH overlooks. 

How to pick a quantitative hedge fund (MAN Group, Sept 2017)
In addition to awareness of one’s own investment criteria, screening quantitative hedge funds for suitability can involve the analysis of factor exposure and asset correlations, a scenario analysis, and an in-depth look at their fund management process.  

The Current State of Quantitative Equity (CFA Institute Research Foundation)
Modern quantitative equity investing is grounded on financial economics theory, specifically the concepts of risk and return.  This paper explores these concepts and additional related themes.

Comparing hedge fund returns - how not to do it (Cliff Asness, May 2018)
Cliff Asness reviews several inaccurate perceptions about relative hedge fund performance, and explains how to properly compare hedge fund returns to traditional active stock picking (100% equity) returns.

An Introduction to Short Selling (Managed Funds Association, 2018)
This paper introduces the practice of short selling, as well as the ways that it is currently regulated. It also explores the risk management aspect of short selling, and other benefits provided to investors.

Preqin Investor Update: Alternative Assets H2 2018
Preqin surveys 530 institutional investors, providing insight about what investors are seeking from alternative assets, how alternatives are meeting their needs, and what their future plans are regarding this asset class.

Hedge Funds In the Late Stages of a Business Cycle (Fidante Partners, Aug 2018)
Fidante Partners investigates hedge fund returns by strategy in the late stages of business cycles, finding that differences do exist, and then suggesting particular strategies that may provide superior performance during these times.

Alpha generation in long-short equity portfolios (Man Group, Jul 2018)
The authors describe a particular quant-heavy approach to equity long-short investing across multiple markets and sectors, bearing in mind risk management lessons derived from the Fundamental Law of Active Management.  

What does the X-Ray Machine Reveal About Hedge Funds? (GSAM, 2018)
The authors collect position level information from 13F filings across a subset of hedge fund managers to learn more about Equity Hedge fund investment behavior and capture their stock selection capabilities.

Do Alpha Males Deliver Alpha? Testosterone and Hedge Funds (2018)
In the hedge fund world, too much testosterone may be a very bad thing.  The authors show that HF managers with higher testosterone levels may have lower risk-adjusted returns and a greater propensity for behavioral biases.

Industry Leaders on the Future of the Hedge Fund Industry (AIMA, 2018)
This 108-page report discusses the evolution of the hedge fund industry since the first hedge fund was created 70 years ago and then turns to questions about the future of the industry itself.

From Beta to Alpha: Why it will pay to be the last active investor standing (AB) 
(For compliance reasons, this paper is only accessible in North America and South America)
As the proverbial pendulum swings back from passive equity strategies towards active investment management, AllianceBernstein explains why avoiding active strategies might mean leaving money on the table.

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