The Pros and Cons of Passive Hedge Fund Replication

A number of major investment banks and asset management consultants have recently launched investment products that promise to replicate hedge fund returns by following rule-based strategies that invest in liquid financial products.

Author(s) :

Noel Amenc

, Professor of Finance and Director of Research and Developmentat EDHEC Business School.

David Schroder

Management Research Centre.

The argument is that such products provide hedge fundlike returns while making it possible to avoid paying the high fees charged by hedge funds. In a recent publication, the EDHEC Risk and Asset Management Research Centre analyses the replicating performance of the two main approaches to hedge fund replication (Amenc et al. 2007). It concludes that, although hedge fund replication is theoretically appealing, it does not, in practice, deliver satisfactory results. Following the study, EDHEC called for practitioner views on replication products. We find that very few of the asset managers who respond to our survey have invested in such products. Many investors are critical of passive hedge fund replication and have doubts about its potential benefits.
Pdf
The Pros and Cons of Passive Hedge Fund Replication...
(-1.00 B)
Type : Publication EDHEC
Date : le 06/10/2008
Extra information : Ce document constitue une synthèse de travaux scientifiques conduits au sein de l'EDHEC. Pour plus d'informations, nous vous prions de vous adresser à Séverine Anjubault de la direction de la recherche de l'EDHEC : severine.anjubault@edhec.edu Les opinions exprimées sont celles de l'auteur et n'engagent pas la responsabilité de l'EDHEC.
Research Cluster : Finance

See Also

Actualités
- 10-12-2017
    A very high-level programme offering unique learning experiences Four partners at the forefront of innovation in their fields of expertise   Press Release   Lille...
FT European Business School rankings 2017: EDHEC cements its position among the top 15
Actualités
- 04-12-2017
EDHEC Business School has consolidated its standing among the top 15 business schools...
QS Ranking 2018: EDHEC Global MBA among best programmes in Europe and worldwide
Actualités
- 28-11-2017
EDHEC Global MBA ranked as the 15th MBA in Europe and 29th MBA in the world : the...
Dean of Sungkyunkwan Graduate School of Business visits EDHEC Business School
Actualités
- 27-11-2017
Dean of SKK GSB visits EDHEC Business School in the framework of strategic agreement...