Riskdata offers 'bias ratio' to detect return smoothing

According to research undertaken by the vendor, 30% of hedge funds are engaged in smoothing – the practice of giving investors a net-asset value figure (NAV) not based on a mark-to-market process and therefore not genuinely reflective of market prices.

The danger for investors – aside from buying excessively high-valued securities – is that they unwittingly expose themselves to high risk.

To fight that trend, Riskdata has integrated a mathematical formula, known as the bias ratio, into FOFiX