The cross section of cumulative returns

This figure compares the distributions of cumulative excess returns over the respective HFR subindex during 24 months after the selection across two subsamples and reports variance ratio test results against the null of equal variance across the subsamples. Each observation for the density estimation is for a single fund. Panel A restricts the sample to 214 selected funds only and compares the young managers (which are defined as those for which due diligence took less than 22 months) to the established managers (22 months of due diligence or longer). Panel B compares selected funds with the matched (see Section 4.2) unselected funds.