Did the STOCK Act impact the performance, risk and flow of hedge funds?
International Journal of Managerial Finance
ISSN: 1743-9132
Article publication date: 28 October 2021
Issue publication date: 26 September 2022
Abstract
Purpose
This research aims to examine hedge funds’ performance, risk and flow before and after the implementation of the Stop Trading on Congressional Knowledge (STOCK) Act.
Design/methodology/approach
This paper includes the use of different factor models to highlight the performance and risk of hedge funds before and after the implementation of the STOCK Act. Hedge fund holdings are retrieved from Thomson Reuters Lipper Hedge Fund Database (TASS).
Findings
This study finds significant differences before and after the implementation of the STOCK Act. The results for the entire sample period indicate that hedge funds suffered lower-alpha, standard deviation and idiosyncratic risk after the implementation of the STOCK Act.
Originality/value
The paper’s originality and value lie in addressing the relationship gap between the STOCK Act and hedge fund performance.
Keywords
Acknowledgements
The authors thank Dr. Alfred Yawson (editor), and the two anonymous referees for their suggestions and helpful comments.
Citation
Samarbakhsh, L. and Shah, M. (2022), "Did the STOCK Act impact the performance, risk and flow of hedge funds?", International Journal of Managerial Finance, Vol. 18 No. 5, pp. 944-978. https://doi.org/10.1108/IJMF-04-2021-0174
Publisher
:Emerald Publishing Limited
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