WEST PALM BEACH, FL (HEDGECO.NET) – Burton Malkiel, an economics professor at Princeton University, and an author of an acclaimed financial market book, �A Random Walk Down Wall Street,� hasquestioned the reliability of most hedge fund performance data, which are being currently reported by major hedge fund tracking indices. According to Malkiel, such data is �tainted and misleading.�Mr. Malkiel charged that there is considerably bias built into such data. He said, �There does seem to be a substantial amount of bias in the reported figures, one ought to look at these kinds ofnumbers with a grain of salt.�
It is uncertain how Malkiel arrived at such a conclusion, but the economics professor is gearing up for the release of his new study, which examined the data collection and reporting strategies utilized by major hedge fund data trackers in compiling such data. For one thing, Malkiel�s report will stir up some controversy as his stock market book �A Random Walk Down Wall Street� did.
While hedge fund industry data continues to evolve, partly due to growing investor interest worldwide, one can argue that keeping pace with such data has increasingly become more challenging. Today most hedge fund tracking firms report overall of global hedge fund assets between US $750 billion to about US $822 billion. It remains to be seen what dimension Malkiel�s report will focus on, but there is no doubt that the hedge fund industry participants and analysts will look forward to the report along with its conclusions.
Lately the hedge fund industry has been witnessing growing attacks and criticisms of its investment philosophy, from government regulatory agency heads such as the Securities and Exchange Commission Chairman William H. Donaldson. His agency is still looking over its regulatory agenda for the growing hedge fund industry. Some of the SEC�s initial proposals have been widely criticized by the hedge fund industry watchdog groups as well as others non-affiliated with the industry.
While some hedge fund market analysts believe that regulatory oversight by the SEC will bring about additional recognition of the hedge fund industry investment philosophy and trading tactics, one can also argue that such oversight has not provided such benefits to Wall Street and mutual funds financial establishments, which continues to experience accountability problems.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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