---
title: "Should you rely on that hedge fund index?"
url: https://arb-maker.com/archives/4057/
description: "Should you rely on that hedge fund index? Posted by Admin on Mar 21, 2016 in ArbMaker News! | No Comments Keeping in similar vein to a number of the…"
published: 2026-08-10
updated: 2026-08-10
---

# Should you rely on that hedge fund index?

Published 2026-08-10

Posted by Admin on Mar 21, 2016 in ArbMaker News!

Keeping in similar vein to a number of the previous entries about the mysteries of defining, selecting and tracking hedge fund strategies here is a 2015 paper by Swiss wealth manager Pictet titled “Hedge fund indices: how representative are they?”

Amongst its gems covering the biases of the indices is this great graphic explaining the source of ‘self-selection’ bias:

Core message: less than one percent of funds report to all the tracking databases. One study puts the impact on the performance figures of this at 1.9% per annum. More worryingly, the cumulative impact of all biases may be as high as 10.7% annually.

Over time that adds up to a lot of dispersion between index providers…

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