Abstract
In this paper we will compare the risk return pattern along with the performance measure of hedge funds to alternative investment vehicles, namely the Exchange Traded Funds (ETFs). Our results showed that exchange traded funds can be used to emulate the hedged funds portfolios’ risk and return matrix, and performance. Exchange traded funds are required to report their investment strategies to the Security and Exchange Commission. Hedged funds have proprietary investment strategies and do not have to report their investment strategies to the Security and Exchange Commission.
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