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Hedge fund managers who trade more outperform: Study

A handful of very active hedge fund managers can outperform the rest, says a new discussion paper that should give much-maligned hedge fund managers a lift.

In a study published Monday by the Board of Governors of the U.S. Federal Reserve, Vassar University economist Ergys Islamaj and Fed research assistant Maziar Kazemi find that more active hedgies’ performance compares favourably to their less active peers. The results could dampen some of the enthusiastic hedge fund bashing that has emerged recently, though the authors caution that the broad variations in the performance of very active managers puts a lot of emphasis on the importance of picking the right one.