Reframing High-Water Logic: From NAV Drift to Daily Threshold Mastery
Most fund managers misinterpret the relationship between NAV and the high-water mark (HWM) by anchoring to long-term drawdown gaps. They often:
Use current NAV as a vague proxy for “distance to recovery”
Assume that crossing the HWM is a binary event, dependent on full-cycle market recovery
Rationalize potential closure based on NAV stagnation rather than …
