Discussion Questions and Problems
1. What does the academic research say about the ability of mutual funds to beat their benchmark?
2. What is the rationale behind paying managers incentive fees?
3. What are some of the fund terms that provide managers with greater investment discretion?
4. What are some reasons that discretion and performance might be related? Give three examples.
5. Why might the location of a manager or domicile of a fund matter to performance?
6. How might service providers impact returns or help preserve capital? Give three examples.
7. Research a major fund failure and evaluate the funds terms and characteristics that led to the failure. Were they all a result of poor investment decisions alone?
8. Evaluate the service offerings of a group of prime brokers and discuss how their offerings are similar and where they are different?
9. Evaluate the service offerings of a group of fund administrators and discuss how their offerings are similar and where they are different?
10. What are some reasons a fund operating in an isolated location with a fund organized in a little known domicile using unknown serivce providers might underperform similar funds that made more mainstream choices about location, domicile, and service proviers? Can you think of reasons while they might actually do better?
Get Hedge Fund Investing: A Practical Approach to Understanding Investor Motivation, Manager Profits, and Fund Performance now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
