Evaluating Hedge Fund Performance

Evaluating Hedge Fund Performance

by VINH Q. TRAN
Released February 2006
Publisher(s): Wiley
ISBN: 9780471681717

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Book description

A comprehensive look at hedge fund performance issues

In Evaluating Hedge Fund Performance, Dr. Vinh Tran gives readers the information they need to construct an efficient hedge fund portfolio based on their own level of knowledge. From evaluating hedge funds to picking the winners, Dr. Tran covers some of the most important issues related to this flexible investment vehicle. Evaluating Hedge Fund Performance takes the standard hedge fund book to a new level by detailing how to manage the risk of hedge funds and offering the best methods to evaluate and monitor hedge funds. With strategy based on interviews and data from experts in the field, this book is a must-read for any investor or manager who is investing in hedge funds.

Table of contents

  1. Cover Page
  2. Preface
  3. Title Page
  4. Copyright
  5. Dedication
  6. Contents
  7. Foreword
  8. Acknowledgments
  9. Introduction
  10. Part One: A Primer on Hedge Funds
    1. Chapter 1: The Market Goes Up Forever?
      1. FLAWS OF LONG-TERM INVESTING
      2. WEALTH-REDUCING EFFECTS OF VOLATILITY
      3. DIVERSIFICATION TO REDUCE RISKS
      4. LONG-TERM INVESTING WITH LOW-CORRELATION ASSETS AND DOWNSIDE PROTECTION
    2. Chapter 2: It's the Risk, Not the Return
      1. NOT NECESSARILY HIGHER RETURNS
      2. CONSISTENCY OF RETURNS
      3. LOW CORRELATION WITH THE STOCK MARKET
      4. PORTFOLIO EFFECTS OF HEDGE FUNDS
      5. ALTERNATIVE INVESTMENTS IN UNCERTAIN MARKETS
      6. WEALTH PRESERVATION
      7. PROSPECTIVE LONG-TERM RETURNS AND RISKS OF STOCKS
    3. Chapter 3: Going for the Gold
      1. SIZE OF THE HEDGE FUND INDUSTRY
      2. INVESTORS IN HEDGE FUNDS
      3. WHAT ARE HEDGE FUNDS?
      4. HEDGE FUND STRATEGIES
      5. PERFORMANCE OF HEDGE FUNDS
  11. Part Two: Evaluating and Selecting Hedge Funds
    1. Chapter 4: The Skewed Statistics of Hedge Fund Returns
      1. PERCEPTION OF RISKS: NUMBERS AND REALITY
      2. GAMING THE SHARPE RATIO
      3. ALPHA: HOLY GRAIL OR WIZARD OF OZ?
      4. RETURNS OF HEDGE FUNDS REVISITED
      5. BENEFITS OF HEDGE FUNDS REVISITED
      6. CONCLUSION
    2. Chapter 5: Evaluating Hedge Fund Strategies
      1. WHICH STRATEGIES?
      2. IS IT UNCORRELATED, REALLY?
      3. HOW NEUTRAL IS MARKET NEUTRALITY?
      4. MARKET RISKS OF HEDGE FUND STRATEGIES
      5. LEVERAGE AND HEDGE FUND RETURNS
      6. LOW CORRELATIONS: THE GOOD AND THE POOR
      7. CONCLUSION
    3. Chapter 6: Picking the Winners
      1. SOURCING HEDGE FUNDS
      2. PRELIMINARY SCREENING
      3. STRATEGY ALPHA
      4. ALPHA GENERATION AND MANAGER TALENT
      5. DUE DILIGENCE
      6. RISK AND PERFORMANCE MATRIX
      7. BEYOND DUE DILIGENCE
      8. CONCLUSION
    4. Chapter 7: Constructing a Portfolio of Hedge Funds
      1. EFFECTIVE DIVERSIFICATION TO REDUCE RISKS
      2. HOW MUCH IN HEDGE FUNDS?
      3. HOW MANY HEDGE FUNDS?
      4. KNOW YOUR OBJECTIVES
      5. HEDGE FUND PORTFOLIOS IN PRACTICE: CASE EXAMPLES
      6. QUANTIFY YOUR JUDGMENT
      7. CONCLUSION
  12. Part Three: Evaluating Performance and Risks
    1. Chapter 8: Evaluating the Performance of Your Hedge Funds
      1. HOW WELL IS YOUR HEDGE FUND PORTFOLIO?
      2. BASIC CONCEPTS OF PERFORMANCE MEASUREMENT
      3. ISSUES DIRECTLY RELATED TO HEDGE FUNDS
      4. MARKET AND HEDGE FUND INDEXES
      5. KNOW YOUR HEDGE FUND MANAGERS OR KEY DRIVERS OF RETURNS
      6. HEDGE FUND BENCHMARKS IN PRACTICE
      7. EVALUATING PERFORMANCE: A HEURISTIC PROCESS
      8. CONCLUSION
    2. Chapter 9: Buyers Beware
      1. THE MANY FACETS OF HEDGE FUNDS' RISKS
      2. EVALUATING THE RISKS OF YOUR HEDGE FUNDS
      3. “LEFT TAIL” RISKS AND OTHER QUANTITIES
      4. ONGOING RISK MANAGEMENT: RISK AND PERFORMANCE MATRIX
      5. CONCLUSION
    3. Chapter 10: Instant Diversification: Funds of Funds
      1. DIVERSIFICATION BENEFITS OF FUNDS OF FUNDS
      2. FEES AND THE PRICE OF ACCESS
      3. REDUCED LIQUIDITY
      4. REDUCED TRANSPARENCY
      5. GENERATING ALPHA: PORTFOLIO REBALANCING
      6. TYPES OF FUNDS OF FUNDS
      7. PERFORMANCE OF FUNDS OF FUNDS
      8. INVESTING WITH FUNDS OF FUNDS
      9. CONCLUSION
    4. Chapter 11: A Practical Guide to Investing in Hedge Funds
      1. INFORMATION ON HEDGE FUNDS
  13. Notes
  14. Bibliography
  15. Index

Product information

  • Title: Evaluating Hedge Fund Performance
  • Author(s): VINH Q. TRAN
  • Release date: February 2006
  • Publisher(s): Wiley
  • ISBN: 9780471681717