Investing in hedge funds when the fund's characteristics are exploitable J. Joenväärä and H. Kahra. Can hedge funds' characteristics be exploited to pick hedge funds? Is a characteristics-based strategy more profitable than a naïve strategy? Joenväärä and Kahra address these questions by using three hedge fund characteristics - managerial incentives, the length of the notice period, and fund size. This approach is derived from a previous paper by Brandt, Santa-Clara, and Valkanov (2008), who exploited the characteristics of equities to build an optimal equity portfolio. More...