Hedge Fund Survivor Bias And The Flaws of Blind Fund-Following Strategies – ValueWalk Premium

Hedge Fund Survivor Bias And The Flaws of Blind Fund-Following Strategies

Numerous financial data and analytics vendors peddle hedge fund tracking strategies and content. Much of this data is hazardous to investors – Hedge fund survivor bias, a special case of the pervasive survivorship bias, is its key flaw. This artifact overstates nominal fund returns by a fifth and conceals mediocre risk-adjusted performance records.

This post is technical, but it illustrates an important phenomenon and sets up the foundation for upcoming . . .

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