This study seeks to determine whether there is a connection between a hedge fund manager's survivorship concerns, his risk shifting, and his investment strategy. After analyzing gross fund returns from 1994 to 2014, this study discovers that the incidence of risk shifting decreases when there are strong managerial survivorship concerns. However, risk shifting occurs far less often when algorithms see use, as opposed to a manager's discretion.
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All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
