Hedge funds not doing enough to fix mispricings, study finds

Passive investing has blunted market efficiency, but hedge funds are failing to capitalise

fix-mispricings-138028797.jpg

Hedge fund managers like to say they keep markets honest by shorting overvalued assets and buying those that look cheap. In reality, though, many seem to have adopted an “if you can’t beat them, join them” strategy that may be contributing to greater volatility in financial markets.

A recent study from academics at UCLA and the University of Minnesota suggests hedge funds are failing to play the stabilising role in markets they say they do, and may even be adding to the effects of passive

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: