Hey there! Sign in to join this conversationNew here? Join for free to post

Are hedge funds just delivering beta?

Announcements Posted on
TSR's new app is coming! Sign up here to try it first >> 17-10-2016
    • Thread Starter

    What do people think about the hedge fund industry?

    A lot of people I talk to say that a lot of them are charging alpha fees for really just delivering beta.

    For those of you who don't know - alpha means what a hedge fund does above just market performance adjusted for risk, beta is correlated to market performance. Essentially a lot of hedge fund returns are highly correlated to the market.

    The rate of return might be similar to the market performance but the risk-adjusted return is higher. People pay hedge fund managers the fees because they believe that they will manage the money better to avoid large losses when there is a market downturn so their money will be safer in his or her hands than in an ETF
Write a reply…


Submit reply


Thanks for posting! You just need to create an account in order to submit the post
  1. this can't be left blank
    that username has been taken, please choose another Forgotten your password?
  2. this can't be left blank
    this email is already registered. Forgotten your password?
  3. this can't be left blank

    6 characters or longer with both numbers and letters is safer

  4. this can't be left empty
    your full birthday is required
  1. Oops, you need to agree to our Ts&Cs to register
  2. Slide to join now Processing…

Updated: October 10, 2016
TSR Support Team

We have a brilliant team of more than 60 Support Team members looking after discussions on The Student Room, helping to make it a fun, safe and useful place to hang out.

Do you like sleeping in a cold room?
Useful resources

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.