Investment-style benchmarks — such as value investor, growth or quantitative — identify money management approaches in every giant investment sector with one glaring exception: the $4 trillion foreign exchange marketplace. Forget dozens of terms that money managers use to compare performance in equity and fixed-income markets. In currency markets the chief benchmark is zero. At the end of the day, traders either make money or they don’t.

The status quo needs to change, especially now, say authors Richard Levich at NYU Stern and Momtchil Pojarliev at Hathersage Capital. Investors mindful of risks and hefty costs — often a 2 percent management fee and 20 percent of excess profits — deserve to know which currency managers really deliver their money’s worth. A landscape with scarce returns adds urgency.

“If currency managers are charging a substantial management fee,” Levich says, “can you replicate their strategy with simple currency trades in most money-management tool kits?” The new paper fine-tunes their evidence that three basic ways to manage currency portfolios dominate most outcomes in currency markets, and any skilled money manager can replicate them.

Historically, currency trading has resisted style comparisons. Experts have trouble just agreeing that currency merits status as an asset class akin to stocks, bonds or real estate. Investors who own stocks, or gold, or a treasury bond can point to underlying assets. “What’s the underlying in currency?” says Levich. For that matter, where is the annual meeting? How do investors vote their proxies? Where are the financial statements?

Such is the debate that a senior currency trader at FXDD declined to tell Institutional Investor through the firm’s public relations person whether in his view currency constitutes an asset class.

Unlike more traditional asset classes, unseen and capricious forces play havoc with currency markets. “Investors get the jitters for good reason,” says Levich. Fundamental values are elusive. Central banks intervene in ways that equity markets would never tolerate. Trading systems for executing currency transactions clear through a separate set of institutions, currency traders operate with unique rules and informed monitors are sorely lacking even if they knew exactly what to look for.

Levich and Pojarliev separate currency traders into “beta grazers” who settle for returns commensurate with going risk premiums and “alpha hunters” who capitalize on market inefficiencies and behavioral bias. (Wall Street analyst Marty Liebowitz coined both terms.) Hence the provocative title of their new research paper: “Hunting for Alpha Hunters in the Currency Jungle.”