How does a society hedge the most atrocious states of nature? Survival cannibalism persisted across societies and until recently. We document that in historical China the Confucian clan, which acted as an internal financial market providing its members with the fundamental functions of finance...

This paper is the first to present evidence on the magnitude of derivative use by mutual funds. Using a unique data set of detailed balance sheet information on open-end mutual funds, we characterize the nature of derivative use by these funds. Most mutual funds using derivatives do so to a very...

We study the relation between hedge fund equity holdings and measures of informational efficiency of stock prices derived from intraday transactions, as well as daily data. Our findings support the role of hedge funds as arbitrageurs who reduce mispricing in the market. Hedge funds invest in...

We investigate an important question for institutional investors — namely, which hedge fund investing styles help to hedge against bad times? We define good versus bad times as (1) up and down equity market regimes derived from the 200-day moving average of the S&P 500 price index or (2)...

We reexamine hedge fund preferences for stock characteristics using aggregate quarterly hedge fund holdings and a large set of firm characteristics. We find that the expanded set of firm characteristics is important in explaining variation in quarterly hedge fund holdings. Consistent with prior...

We examine the relation between changes in hedge fund stock holdings and measures of informational efficiency of equity prices derived from transactions data, and find that, on average, increased hedge fund ownership leads to significant improvements in the informational efficiency of equity...