Resource Search

Although hedge funds have been blamed for much of this year's market volatility, they could be the vehicles to bring liquidity back to financial markets and help jump-start markets on their road to recovery. In this report, a Bank of America executive suggests that as many as one-third of hedge funds may close in early 2009, strengthening the industry as weak players leave and creating investment opportunities later in the year.

While hedge funds greatly disappointed a number of investors in the past year, Allenbridge finds reasons not to abandon this asset class. This report explains what happened in the sector, dispels some of the misconceptions and offers pointers for hedge fund investors.

Conventional logic indicates that a down market offers value buys for investors willing to take a chance on assets that have dropped precipitously in price. But which of these assets are most likely to regain value, and how much of a portfolio is it reasonable to invest in them? Cambridge Associates examines the outcomes of the 1990 and 2001 recessions for distressed assets and suggests four key components of a successful distressed investment strategy.

After the heavy stock market losses of last fall, many regulatory agencies issued restrictions on the short selling of stocks. In this independent analysis for the Alternative Investment Management Association, researchers examine the effect of these restrictions on stock returns in six countries and find no strong evidence that the restrictions had an impact in the United Kingdom or elsewhere.

This article from Hammond Associates refutes conventional wisdom that says domestic equity indexes are more likely to outperform active managers in efficient markets, such as large-cap stocks, and more disposed to underperform active management in less efficient areas, such as small-cap stocks. The authors present an alternate theory that better explains active versus passive equity performance and how investors can use it to their advantage.

Global investment in physical infrastructure has been a prime driver of growth in emerging markets, but sustained growth also requires investment in an intangible infrastructure that many emerging nations lack. Credit Suisse identifies five pillars of intangible infrastructure (education, health care, development of the financial system, technological investment and the penetration of business services) and singles out companies with the greatest growth potential within these pillars.

Having conducted a survey of Vanguard IRA and 401(k) investors, the authors show that investors who score highly on tests of "emotional intelligence" (EI) tend to exhibit behaviors (e.g., the use of low-cost fund options, a decision not to trade too frequently) that correlate strongly with good investment performance.

What's the best approach to equities, given the current volatile market? In this research report, Barclays Wealth offers short-term and medium-term strategies related to equity markets. The report also explores equity stock screening and considers European banks and insurers.

Adapting to the current market slowdown and financial crisis means re-evaluating asset allocation models, uncovering investment ideas and carefully positioning a portfolio. Emanuel Balarie of Balarie Capital Management examines the role that managed futures can play in managing wealth wisely during a bear market.

Given the credit crunch and market crisis, does private equity still work as a sustainable core holding? Pictet & Cie takes a closer look at private equity in the current market context and argues that it does work, that it should not be affected significantly by market cycles and that private equity fund-raising is on track to set new records this year.