Hedge Fund Replication and Access Strategies
Free CAIA Level II lesson in Accessing Alternative Investments. 29 min read, ~4,286 words.
Replication products (clones or trackers) capture the traditional and alternative betas of a hedge fund benchmark using factor-based, algorithmic (bottom-up), or payoff-distribution approaches. There are exactly three approaches to accessing hedge funds: direct, delegated (funds of hedge funds), and indexed. SMAs and replication products are not separate curriculum access modes...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- replication overview
- case for replication
- replication benefits
- factor replication
- algorithmic replication
- hf risk returns evidence
- hf access approaches
- fohf characteristics
- fohf construction
- fohf value add
- investable hf indices
- private vs listed
- unlisted re funds
- pe re performance drivers
- listed re funds
- investing commodities
- etns private commodities
- leveraged option commodities
- managing commodity exposure
- accessing digital assets
- illiquidity premium listed
- private vs listed re perf
- pme challenges
- multiple eval tools
- irr aggregation
- private fund considerations
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