Skewness of Funds – Friend or Foe?

It’s complicated.

Nicolas Rabener
10 min read
20 May 2024

SUMMARY

  • Some funds exhibit strong skewness profiles
  • Skewness is highly time-varying and not necessarily a negative criteria
  • Should be measured but unlikely managed

INTRODUCTION

The trouble with investing in emerging markets is that they are quite different, which requires extensive due diligence on each of them, and they also can change quickly. For example, take Argentina versus China. The former has been mismanaged for decades, while the latter has been managed exceptionally well for the size of the country, lifting close to a billion people out of poverty.

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