Retirement income should also rest on a privately funded pillar, which can provide higher, if more volatile, returns.
A well-managed hedge fund is devised to make money in good markets and bad, with less volatile returns.
An institutional investor might put only 1% of its portfolio in such a fund in the hope of high but volatile returns.
The pitch is that hedge funds have produced better, and less volatile, returns than the bond or equity markets as a whole.
But shareholders are selling out in droves because Jenkins needs more of their money every year to earn what are very volatile returns.
Historically, it turns out that Andersen's clients had less volatile returns than those of other companies, even after adjusting for major differences in industry composition.
REUTERS Lampert Uses Stock to Meet Withdrawals From Fund | Bloomberg News reports: "Edward Lampert used $393 million of shares in AutoNation Inc. to meet client redemptions from his main hedge fund, whose investment in Sears Holdings Corp. has led to volatile returns".
That made it much more expensive to pay back yen-denominated debt.In this section Muck in the fuel pipe When good news is bad news 2020 vision Falling knives Rate and see State of pay Crash and carry ReprintsIf efficient-market theory cannot kill the carry trade, why don't volatile returns, and the occasional massive loss, scare off investors?
In its report, Credit Suisse, based in Zurich, called its results "unsatisfactory" and attributed them to "extremely low investment income" in the Winterthur insurance business, which it acquired in 1997 hoping to diversify into a business with less volatile returns than investment banking.
Stiroh (2004a,b) found that noninterest income is associated with more volatile returns and lower risk-adjusted profits.
