Secrets of Big Investors

Research from Yale SOM’s Tobias Moskowitz, making use of industry data, examines the strategies of large-scale traders to find out how they avoid market predators and keep trading costs low.

The paper is co-authored by Andrea Frazzini and Ronen Israel of AQR Capital Management and finds that big investors such as investment banks, mutual funds, and hedge funds minimize the costs of trading by adopting a slow-and-steady investment strategy.

Their actual costs, the research revealed, are significantly lower than previous estimates by other scholars. The team was also able to compare how trading costs vary across global markets with different rules.