Self Selection Bias in Hedge Fund Databases

Hedge funds can choose to report their results to database providers who report the overall performance of hedge funds in various categories.

Since performance disclosure is voluntary, peer performance is not a reliable measure. Poor performing managers are not likely to disclose performance (biasing performance upward) and large established managers may not want the trouble (or may want to make their performance stand out rather than be averaged into the peer group.) The aggregate effect is probably that database returns are overstated.

For more information, see all articles on: Uncategorized

See also:
  • Hedge Fund Databases: Sample Selection Bias
  • Hedge Fund Benchmarks
  • Are Hedge Fund Strategies Just About Leverage?
  • Hedge Fund: Kurtosis Definition & Explanation : Hedge Fund
  • Hedge Fund Strategies: Risk Arbitrage
  • Technical Analysis Explained : The Successful Investor's Guide to Spotting Investment Trends and Turning Points

    The Intelligent Investor: The Classic Text on Value Investing

    Financial Statement Analysis: A Practitioner's Guide, 3rd Edition

    Managing Investment Portfolios: A Dynamic Process (CFA Institute Investment Series)

    Leave a Reply

    You must be logged in to post a comment.