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A Comparison of Quantitative and Qualitative Hedge Funds

50 Pages Posted: 8 Jan 2010 Last revised: 1 Mar 2010

Ludwig B. Chincarini

University of San Francisco School of Management; University of San Francisco - School of Business and Management

Date Written: January 7, 2010

Abstract

In the last 20 years, the amount of assets managed by quantitative and qualitative hedge funds have grown dramatically. We examine the difference between quantitative and qualitative hedge funds in a variety of ways, including management differences and performance differences. We find that both quantitative and qualitative hedge funds have positive risk-adjusted returns. We also find that overall, quantitative hedge funds as a group have higher alphas than qualitative hedge funds. The outperformance might be as high as 72 bps per year when considering all risk factors. We also suggest that this additional performance may be due to better timing ability.

Keywords: quantitative portfolio management, alpha, hedge funds, returns

JEL Classification: G0, G10, G11, G23

Suggested Citation

Chincarini, Ludwig B., A Comparison of Quantitative and Qualitative Hedge Funds (January 7, 2010). Available at SSRN: https://ssrn.com/abstract=1532992 or http://dx.doi.org/10.2139/ssrn.1532992

Ludwig B. Chincarini (Contact Author)

University of San Francisco School of Management ( email )

San Francisco, CA 94102
United States

University of San Francisco - School of Business and Management ( email )

San Francisco, CA 94117
United States

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