"What causes prices to be wrong?"
It could be either a specific feature of investor psychology, or it could be some sort of institutional effect.
Sentiment risk is when you correctly identify a cheap stock, but it gets even cheaper. Sentiment risk is likely to cancel out in the long run, as prices eventually revert to fundamental value, but can be very damaging in the short run as sentiment will be correlated across stocks.
A smile volatility fund
Designed to offer portfolio protection in market environments such as these ...
Strategy exploits the undervaluation of best performing stocks of this basket and the undervaluation of the worst performing stocks of the same basket
Part II: a case study on embracing & successfully integrating responsible investing in the asset allocation process
Policy-wise: The main challenge lies in identifying external hedge fund managers with any form of SRI standards.
A review by UN and Mercer earlier this year concluded that of 20 academic studies, 10 found a positive effect on returns from applying ESG [environmental, social and governance issues] factors, while 7 found a neutral effect and 3 a negative effect.
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