We study the loosening of restrictions on the use of leverage, derivatives, and illiquid assets by mutual funds. In contrast to previous studies, we find that the allowance of these complex instruments is associated with poor performance and higher risk. The underperformance is most acute during...

The purpose of this article is to show on the example of Warsaw Stock Exchange, Poland (WSE) how in emerging capital markets dividends provide information about earnings quality as measured by their persistence. In the paper the regressions models of future earnings (in years t + 1 and t + 2)...

We reconsider the question of whether beta-centric hedge fund activity is predictive of superior performance. We construct a measure of overall beta activity of fund managers, Beta Activity, and find evidence that top beta active managers deliver superior long term out-of-sample performance...