Charles Clough is the founder of Clough Capital Partners, which reported nearly $5 Billion total assets in its last 13F filing. The firm manages a close-end equity mutual fund, Clough Global Equity Fund. The fund is launched in January 2005. Utilizing the firm’s research-driven, thematic process, the Clough Global Equity Fund is aimed at providing a high level of total return. The Fund invests more than 80% in equity and equity-related securities, and the rest in fixed income securities in both domestic and overseas markets.
Your source for free real-time insider trading data, Insider Monkey, analyzed the returns of Clough Global Equity between April 2005 and June 2011. The data is sourced from Yahoo Finance and the earliest data we can find is April 2005. We used Carhart’s four factor model with Kenneth French’s factor returns to calculate the fund’s alpha and betas.
Here is the result of the regression:
Clough Global Equity has a negative alpha of -5.5 basis points per month, which is about -0.66% per year since it was formed. Clough Global Equity has a beta of 1.14, meaning that the fund is riskier than the market. The coefficient on the size effect is -0.11, indicating that the fund has a small tilt towards large cap stocks. The coefficient on value effect is -0.23, meaning that the fund invested more in growth stocks than value stocks. But the fund did not employ momentum investing as the coefficient on the momentum effect is almost zero. All the coefficients, except beta, are not statistically significant, which is because of the fact that there are less than 80 data points in total. This also means that Clough’s fund is just a leveraged play on the market index.
Clough Global Equity did not perform well since its establishment. It almost generated a zero alpha and it is riskier than the market. Investors were not able to achieve abnormal returns simply by investing their money in Clough Global Equity Fund.