A periodic analysis : hedge funds during bull and bear market periods

Abstract

Hedge funds should, in principle, continuously deliver absolute returns that outperform market indexes due to their adaptability in taking advantage of any economic environment and the fact that they attract the brightest financial wits. Accordingly, in order to accomplish the aforementioned, this research empirically examines hedge funds monthly returns over a twenty-year period from 2000 till 2020. The data covers both periods of bearish and bullish market conditions. Different hedge fund strategies will be utilized to assess whether the funds are able to deliver consistent absolute returns. The findings suggest ways which need to be considered by a portfolio investor who want to diversify their risk and maximize their returns.