Momentum underperformance poses renewed challenges for hedge funds’ alpha

Alpha generation

The recent underperformance of momentum stocks suggests the prevailing trends of recent years are drawing to a close - potentially making alpha generation increasingly challenging for hedge funds, according to Man Group analysts.

After more than two years of strong performance, momentum names – trades which capitalise on existing market trends, either upward or downward - suffered a sharp reversal towards the end of 2019.

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