Andrew Beer on the Hedge Fund Industry (Podcast)
Masters in Business
00:00
Managed Futures and Single Manager Risk
The two issues with managed futures which are very very real is that first managed futures fees and expenses are still ridiculously high. The second problem is what we call single manager risk when a guy outperforms everybody else by 10 or 15 percent a year for two or three years it's luck not skill if that they happen to be overweight treasuries in March at the time gold took off. So our approach to it was really we've got to solve if we want the two first benefits you'vegot to solve those two issues. We replicate 20 of the largest managed futures hedge funds but you replicate what they're doing before fees so if they're long gold by 15 percent will go long gold by15
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