Re: creating a bench for a hedge fund. It is not meaningful to have an equal weighted HF bench 'cos an equal weighted bench is: a) not investable b) not rebalanced as often How many agree with either (state which one and reason) or neither
a) disagree b) disagree
a) not investable - correct. Equally weighted indices are not investable. b) not rebalanced as often - correct. Due to transaction costs, requirement to hold fractional shares, liquidity, etc. it may not make sense to rebalance dynamically.
As far as I know, equal weighted benchmarks are rebalanced the most.
A) AGREE! Good luck trying to get into each fund that is in the benchmark to begin with, then try to rebalance with 1-3 year locks. B) Equal Wgth is rebalanced MORE to keep adjusting the index to be “equal wghtd”
CC, your logic is correct, but that is the problem with Equal Wghtd that fact that they have to be constantly rebalanced to maintain the equal weightings…
my interpretation was that - they are not rebalanced as often “as they should be” I think others interpreted it as - not rebalalnced as often to “other indexing strategies”
haha another poorly worded question that could have been interpreted both ways.