- Hardcover: 352 pages
- Publisher: John Wiley & Sons (9 Jan 2007)
- Language English
- ISBN-10: 0470042664
- ISBN-13: 978-0470042663
- Product Dimensions: 16.4 x 3 x 23.6 cm
- Average Customer Review: 5.0 out of 5 stars See all reviews (1 customer review)
- Amazon Bestsellers Rank: 822,230 in Books (See Top 100 in Books)
- See Complete Table of Contents
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More About the Author
Product Description
Product Description
In Asymmetric Returns, financial expert Alexander Ineichen elevates the critical discussion about alpha versus beta and absolute returns versus relative returns. He argues that controlling downside volatility is a key element in asset management if sustainable positive compounding of capital and financial survival are major objectives. Achieving sustainable positive absolute returns are the result of taking and managing risk wisely, that is, an active risk management process where risk is defined in absolute terms and changes in the market place are accounted for. The result of an active risk management process–when successful–is an asymmetric return profile, that is, more and higher returns on the upside and fewer and lower returns on the downside. Ineichen claims that achieving Asymmetric Returns is the future of active asset management.
Alexander M. Ineichen, CFA, CAIA, is Managing Director and Senior Investment Officer for the Alternative Investment Solutions team, a key provider within Alternative and Quantitative Investments, itself a business within UBS Global Asset Management. He is also on the Board of Directors of the Chartered Alternative Investment Analyst Association (CAIAA). Ineichen is the author of the two UBS research publications In Search of Alpha—Investing in Hedge Funds (October 2000) and The Search for Alpha Continues—Do Fund of Hedge Funds Add Value? (September 2001). As of 2006 these two reports were the most often printed research papers in the documented history of UBS. He is also author of the widely popular Absolute Returns—The Risk and Opportunities of Hedge Fund Investing, also published by John Wiley & Sons.
From the Inside Flap
In order to meet the demands of the investment community, the asset management industry has to continually evolve. Around the year 2000, the latest phase of this evolution began to take place. During that time, hedge funds started to seriously compete with the traditional asset management industry—especially for institutional assets. Since then, investors have distinguished more carefully between alpha and beta, absolute returns and relative returns, and skill–based strategies and market–based strategies.
Author Alexander Ineichen has been on the cutting–edge of the money management industry throughout his entire career. He knows how difficult it is to find alpha in today′s increasingly efficient markets, but he also understands how the current paradigm shift in the field of finance can help you overcome this obstacle.
Filled with in–depth insights and expert advice, Asymmetric Returns claims that it is possible for an active investment approach to yield a higher and more sustainable long–term return with lower downside volatility than is obtainable through passive, long–only strategies. The term asymmetry refers to most investors preferring positive returns over negative returns, that is, a return distribution skewed to the "upside."
In essence, Asymmetric Returns is a manifesto for active asset management. Written in a straightforward and accessible style, this comprehensive guide reveals what it takes to achieve an asymmetric return profile—including an entrepreneurial mindset as well as a dynamic and flexible risk management process that truly corresponds to the end investors′ risk preferences—and outlines the essential elements of this innovative investment approach.
Topics discussed within these pages include:
- The importance of understanding and managingportfolio volatility
- The issue of risk and transparency in today′sinvestment environment
- The price of asymmetric returns
- How alpha is an option from the perspective of an investor
- Asymmetric returns as a business
- The current conversion between the absolute returnworld (investment banks, hedge funds) andtraditional asset management
The future of active asset management will rely more on finding and exploiting investment opportunities where the risk/reward relationship is asymmetric and less on beating an arbitrary benchmark. With Asymmetric Returns as your guide, you′ll discover how to do this and much more, as you work to achieve sustainable positive absolute returns through an active risk management process.
Inside This Book
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Customer Reviews
Most Helpful Customer Reviews
Format:Hardcover
The main theme of this dense book is the future of the asset management industry. Alexander M. Ineichen claims that the investment business has undergone a paradigm shift, away from buy-and-hold and toward absolute-return investing. He explores the origins and implications of this shift in considerable detail and enjoyable prose. But, beware, this is not a book for beginners or generalists. Even close students of finance may find it difficult to follow the author's argument through his many detours and tangents (interesting as they are). Ineichen is an ardent fan of high-risk, high-leverage hedge fund investing, so his book will be controversial in the post-subprime-crisis atmosphere, where that kind of investing has fallen from grace. Ineichen quotes John Maynard Keynes as saying, "When circumstances change, I change my view. What do you do?" Published in 2007, the book references the equity market bubble of 1995 to 2000 as the most recent instance of large-scale market inefficiency, but getAbstract wonders whether the author would change his view after the much more consequential financial collapse of 2008.
Most Helpful Customer Reviews on Amazon.com (beta)
Amazon.com:
9 reviews
20 of 22 people found the following review helpful
Good info hidden in digressions and errors
10 Jan 2007
Format:Hardcover
The author presents some useful information, but the writing style and errors make it difficult to access. The writing style includes choosing first person plural for his voice, as in, Queen Victoria's "We are not amused." It also includes impossibly twisted sentences with the verb and object seperated by some of the world's longest and least meaningful digressions. These elements force the reader to dig out the information undeniably contained in the book.
One of my favorite examples is the following short paragraph. The author is discussing a chart plotting the Nikkei and Dow Jones indices. He points out that they've crossed several times in the last 50 or 60 years. He then says (pg 299),
"They will meet again, we're sure. We just don't know when and where. Can we really be sure? Will they cross again? We actually do not know that either with any degree of confidence."
What am i supposed to make of that?
Errors include a multitude of grammatical errors, mispellings, words left out, sentence fragments. Did this book have an editor? This was published by Wiley. What the heck did they add?
Unfortunately, the errors also include serious technical misunderstandings. For example the author asserts that for returns to be serially uncorrelated, they must be normally distributed. That's trivially untrue.
I found the book useful, but the reader needs to be careful using it.
One of my favorite examples is the following short paragraph. The author is discussing a chart plotting the Nikkei and Dow Jones indices. He points out that they've crossed several times in the last 50 or 60 years. He then says (pg 299),
"They will meet again, we're sure. We just don't know when and where. Can we really be sure? Will they cross again? We actually do not know that either with any degree of confidence."
What am i supposed to make of that?
Errors include a multitude of grammatical errors, mispellings, words left out, sentence fragments. Did this book have an editor? This was published by Wiley. What the heck did they add?
Unfortunately, the errors also include serious technical misunderstandings. For example the author asserts that for returns to be serially uncorrelated, they must be normally distributed. That's trivially untrue.
I found the book useful, but the reader needs to be careful using it.
1 of 1 people found the following review helpful
Important Contribution
11 Feb 2008
Format:Hardcover
This serious, yet engagingly-written book thinks in new ways about how value is added in the portfolio management process, how one might look more correctly at the job of the investment manager (with an intense light on those functions that deserve a high management fee, and those that do not). Ineichen examines in a very clear way the meaning of alpha (the value added by investment management) as the structural ability to provide non-linear -- asymmetric -- return patterns; ones where the risk of negative returns to the portfolio is less than the opportunity for positive ones. Written in an approachable style that nevertheless makes some very important contributions, often with a touch of humor. Valuable perspective for investment professionals and their clients.
1 of 1 people found the following review helpful
Enlightening and entertaining
16 Feb 2007
Format:Hardcover
Even if you are interested in the subject, most finance books are dry and boring. This book is not one of them. I find this book informative, at times thought provoking, and very entertaining. As with the author's other book "absolute returns", the author managed to weave together tons of data into a coherent framework, shedding much light on an otherwise opaque industry. The focus is not so much on theory but on the practical realities of the active fund management industry. While there are many books about hedge funds, many are long on theory but short on practice. This book is a synthesis of both theoretical and practical elements that I find missing in other books.
Although certain section of the book would be shorter, I find the book essential reading for understanding the seismic shifts that are taking place in an increasingly important industry that is at the forefront of the financial innovations.
Although certain section of the book would be shorter, I find the book essential reading for understanding the seismic shifts that are taking place in an increasingly important industry that is at the forefront of the financial innovations.
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