Can Hedge Funds Alpha Be Replicated With Low Cost Products?

From All About Alpha, some great posts on whether hedge fund alpha can be replicated with quantitative, low-cost models: Below are three sample entries, but All About Alpha has pounded this topic with about 10 entries the last couple of days.

State Street MD on hedge replication model: “I was shocked the explanatory power was so high”

Will hedge funds regress towards index-like products?

Kat: Why Accurately Replicated Hedge Fund Indices Won’t Do You Much Good

Those who know me can take a good guess about whether I believe the 8,000 hedge fund managers who are now in the field are, in meaningful numbers, generating idiosyncratic alpha. And if they are not, then their fee/performance model is all wrong....

Posted on March 27, 2007 and filed under Finance.