4 ms·

What are Elliott's benchmarks?

by whatok 8y ago

throwaway5752 8y ago
No idea, this is general comment about all hedge funds. I'm not an investor in the fund, but based on a quick search they're a 2/20 fee structure so they better outperform the SPX.
- whatok 8y ago
  Hedge funds generally do not track benchmarks as the point of them is to provide diversified return streams. Over a specific time window, any hedge fund worth its salt should outperform vs SPX but really shouldn't be month to month.
  - throwaway5752 8y ago
    Yes, and their long term returns support this. My phrasing was regrettable, but my feeling is that they are doing a post hoc rationalization for what maximizes their profit (or are describing themselves as an amoral agent in a complex system, at best).
    - whatok 8y ago
      Obviously their entire reason for existence is to make money and no one believes anything different. I think that they also provide a valuable service to the markets and that Paul Singer (at least at this stage in his life) sees himself as an activist beyond the investment world. I don't agree with all of their methods but think that they're a necessary boogieman in order to prevent shareholders from getting ripped off. Definitely the most aggressive in their space and they attract a lot of attention for it but no one ever seems to ask about why these companies were run in such a poor fashion to begin with.
- cascom 8y ago
  they are not trying to beat the spx... they are trying to produce positive, low volatility, uncorrelated returns...
cascom 8y ago
There are a number of relevant indices, I've put a link to one below [1]. the short version is that they would probably be categorized as a multi-strategy event-driven manager, and as such would be compared against other similar managers investing in similar strategies (distressed debt, activist, etc). Most hedge fund managers are focused on risk-adjusted returns rather than relative returns and people often use either a sharpe ratio [2] or sortino ratio [3] as a rough proxy in addition to measuring pure absolute returns. [1] https://www.hedgefundresearch.com/family-indices/hfri https://www.hedgefundresearch.com/family-indices/hfri [2] http://www.morningstar.com/InvGlossary/sharpe_ratio.aspx http://www.morningstar.com/InvGlossary/sharpe_ratio.aspx [3] http://www.morningstar.com/InvGlossary/sortino_ratio_definition_what_is.aspx http://www.morningstar.com/InvGlossary/sortino_ratio_definit...

What are Elliott's benchmarks?

by whatok 8y ago

What are Elliott's benchmarks?

No idea, this is general comment about all hedge funds. I'm not an investor in the fund, but based on a quick search they're a 2/20 fee structure so they better outperform the SPX.

whatok 8y ago
Hedge funds generally do not track benchmarks as the point of them is to provide diversified return streams. Over a specific time window, any hedge fund worth its salt should outperform vs SPX but really shouldn't be month to month.
- throwaway5752 8y ago
  Yes, and their long term returns support this. My phrasing was regrettable, but my feeling is that they are doing a post hoc rationalization for what maximizes their profit (or are describing themselves as an amoral agent in a complex system, at best).
  - whatok 8y ago
    Obviously their entire reason for existence is to make money and no one believes anything different. I think that they also provide a valuable service to the markets and that Paul Singer (at least at this stage in his life) sees himself as an activist beyond the investment world. I don't agree with all of their methods but think that they're a necessary boogieman in order to prevent shareholders from getting ripped off. Definitely the most aggressive in their space and they attract a lot of attention for it but no one ever seems to ask about why these companies were run in such a poor fashion to begin with.
cascom 8y ago
they are not trying to beat the spx... they are trying to produce positive, low volatility, uncorrelated returns...

cascom 8y ago

There are a number of relevant indices, I've put a link to one below [1]. the short version is that they would probably be categorized as a multi-strategy event-driven manager, and as such would be compared against other similar managers investing in similar strategies (distressed debt, activist, etc). Most hedge fund managers are focused on risk-adjusted returns rather than relative returns and people often use either a sharpe ratio [2] or sortino ratio [3] as a rough proxy in addition to measuring pure absolute returns. [1] https://www.hedgefundresearch.com/family-indices/hfri https://www.hedgefundresearch.com/family-indices/hfri [2] http://www.morningstar.com/InvGlossary/sharpe_ratio.aspx http://www.morningstar.com/InvGlossary/sharpe_ratio.aspx [3] http://www.morningstar.com/InvGlossary/sortino_ratio_definition_what_is.aspx http://www.morningstar.com/InvGlossary/sortino_ratio_definit...