Hedge Fund Investments Riskier Than They Seem, Investors Beware!
Hedge fund indices show weird patterns in their returns, like skewness and kurtosis, which can trick investors into thinking they're less risky than they really are. This means that traditional ways of measuring risk and return, like Sharpe ratios and mean-variance analysis, might not work well for hedge funds. Different indices can give very different views of how well hedge funds are doing, so investors need to be careful which ones they use to judge performance.