2 ms·
It's not necessarily about if the fund outperforms an index. Most hedge funds have the primary goal of not losing money. The Sharpe Ratio should be used when c
by avbanks 7y ago
It's not necessarily about if the fund outperforms an index. Most hedge funds have the primary goal of not losing money. The Sharpe Ratio should be used when comparing hedge funds vs equities/indexes.
- n4r9 7y agoThanks for the reference! I looked it up and yes, the Sharpe Ratio pretty closely encodes what I think I meant by "how well it outperforms an index fund". I'm pretty conservative when it comes to gambling my own money so I doubt I'd ever go near a hedge fund. Since getting involved in a debate on here about the Kelly Criterion I've wondered on-and-off what the best way to bet is, if you want to maximise the bottom 5th percentile of your profit.