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To attract new clients, hedge funds often include past returns of funds only if they were successful. this is called __________.

Sagot :

To attract new clients, hedge funds often include past returns of funds only if they were successful this is called backfill bias. Instant history prejudice, also known as "backfill bias," is a phenomena in which irregular reporting processes can artificially inflate a hedge fund's apparent success.

This error derives from hedge fund managers' ability to choose whether and when to reveal their results to the public. Backfill bias happens when an index provider adds a new fund to their index and "fills in" the fund's previous returns . Managers may choose to defer publishing a product's returns until it warrants investor interest when listing programs in a database.

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