The Hidden Reason Why Hedge-Fund Returns Are at Risk

(Bloomberg)Smart money is blindsided by a flaw of its own making hiding in plain sight — an investing maxim quants have known for an age. Blame bets on volatility. Research from Robeco Asset Management’s David Blitz concludes hedge funds have hitched their wagon to stocks with large equity-price swings — a misguided strategy over the long haul.

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