The Dutch-based trend follower Transtrend offers insights into "benchmarks":
Benchmarks problem: "Hedge funds" are not an asset class because different hedge fund strategies are fundamentally different in their:
1. Source of return.
2. Shape of distribution of returns.
3. Correlation structure with traditional asset classes.
Also keep in mind:
1. Hedge fund styles can differ even more from each other than traditional asset classes can.
2. A benchmark is only meaningful if it acts as a proper description of an investment strategy (such as 'Equity long only' or 'TrendfollowingCTA's').
3. Benchmarking does not excuse the investor for not understanding the investment.
Source: Transtrend
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