Performance Persistence of Funds of Funds Hedge Funds

This article aims at testing empirically the performance persistence of funds of funds hedge funds. Funds of hedge funds invest solely in other hedge funds. The hedge fund manager selects funds based on a specific investment strategy or a combination of different investment strategies to achieve a better return. High values of the Treynor, Sharpe and information ratio are an indication of a skillful manager that adds value in terms of better performance persistence of the funds. In contrast, low values of the Treynor, Sharpe and information ratio are an indication of a manager that shows low performance and no value in terms of stock picking ability. Guirguis, (2022), found that the results in term of Treynor, Sharpe and information ratio are mixed. There is mixed evidence of long-term performance persistence. All funds display positive figures in terms of the share average returns. Positive returns indicate that the manager is skillful in terms of share picking ability. The sample is provided from Data Feeder dataset. It includes funds of funds hedge funds for the period 1990 to 2003.