High alpha, low beta, middling truth?

December 09, 2011   Rob Copeland

As yearend approaches, scrutiny falls on conveniently-timed performance gains from some managers.

Growing evidence suggests that many hedge funds resort to gimmicks when reporting their investment performance.

Among the tricks: revising returns higher in December to maximize performance fees, taking longer to report results in months with negative performance, and more frequently reporting razor-thin positive monthly returns, rather than equally tight negative ones. All the fancy footwork, however, may not pay off.

One study, from researchers at...


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