H. Markowitz publishes “Portfolio Selection” in 1952 and “creates” MPT.
W. Sharpe advocates for a single “market” portfolio in his CAPM in 1964.
B.G. Malkiel publishes ” A random walk down Wall Street” in 1974.
J.C. Bogle/Vanguard create the first Index tracker in 1975.
MSCI issue the first factor-based indices in 1998.
Merrill Lynch and Goldman Sachs look for hedge fund replication factors by 2004 -05.
By 2009, many institutions have already gone to HF strategy indices.
www.hedgefundreplication.com publishes a HF benchmark and studies show that 85% of HF performance can be replicated, the remaining 15% vanishing in fees.
HF holdings are likely to evolve towards core (HF replica) – satellite (single HF) holdings of a new type.