What they mean by"reporting and compounding frequency can impact apparent hedge fund perfprmance because of infrequent exit in to/out of funds’? I can see how returns could be affected by the frequnecy of compounding but what has it got to do with exit in/to out of funds? Also, what do they mean by ‘Leverage is accounted for assuming that the positions have been fully paid for. This can cause leverage to result in asset being weighted one way and performance being measured based on a difffernt investment amount’.
I am surprised that no one jumped to clarify. I have written to stalla instructor. I will post the answer if I get one from him… I dont know if it is so basic that no one wants to even attempt it…
>I will post the answer if I get one from him… Please do. I was confused about those statements too.
krishna1 Wrote: ------------------------------------------------------- > What they mean by"reporting and compounding > frequency can impact apparent hedge fund > perfprmance because of infrequent exit in to/out > of funds’? Maybe they mean that if you dont compound frequent enough (on days of large cashflows as in/out exists are [cashinflow/outflow]) your performance will be distorted > > I can see how returns could be affected by the > frequnecy of compounding but what has it got to do > with exit in/to out of funds? > > Also, what do they mean by ‘Leverage is accounted > for assuming that the positions have been fully > paid for. This can cause leverage to result in > asset being weighted one way and performance being > measured based on a difffernt investment amount’. I think it means if you borrowed 100k, they would account as if you had 100k… just 2c
can someone look up for the page number in the stalla books for the following quotes: It is under other performance issues for Hedge funds under"Returns". I have the 2007 version of stalla and the instructor asked for the page number so that he can look at it and explain it furhter. Pls read my initial email t the start of this chain if you are wondering what I am asking for…thanks "reporting and compounding frequency can impact apparent hedge fund perfprmance because of infrequent exit in to/out of funds’? ‘Leverage is accounted for assuming that the positions have been fully paid for. This can cause leverage to result in asset being weighted one way and performance being measured based on a difffernt investment amount’.
BW I thought you are using stalla. can you look up for the page number pls. thanks
Pg. 11-37 I’m assuming it means that since hedge funds only report Monthly NAVs their returns are going to be smoothed out then if they were reporting weekly or daily returns.