ABSTRACT: Investment pools are frequently designed to pay health care expenses. We examine whether health care equity investments hedge health care liabilities. In contrast with conventional wisdom, we find them uncorrelated and, thus, poor hedges.
This paper is co-authored with Steve Fraser, formerly of the U.S. Air Force Academy and now at Florida Gulf Coast University, and Brian Payne, of the U.S. Air Force Academy and currently pursuing his Ph.D. at the University of Nebraska. The paper is available on SSRN as of 29 November 2007.
The paper was published in the Spring 2009 issue of the Journal of Investing.
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