Mastered by the universe
IT IS turning into another difficult year for the hedge fund industry. A survey by Globeop found that, in June, funds suffered the largest withdrawals in assets since October 2009. Eurekahedge found that hedge funds suffered their fourth consecutive month of negative returns in June; in the first half of the year, they eked out a return of 1.3%, compared to a 3.7% gain for the MSCI World index. That follows a 3.6% decline in 2011. for those investors who picked a fund-of-funds, with the accompanying extra layer of fees, a 0.4% return this year followed a 5.4% loss in 2011. In short, investors have lost money over the last 18 months.See also:
The marketing claims of hedge funds have changed over the years. In the 1990s, the glory days of George Soros and Michael Steinhardt, it was argued that hedge fund managers were the "smartest guys in the room" who could produce superior returns. In the 2000s, as equity markets faltered, it was claimed that hedge fund managers delivered absolute returns; they tended not to lose money. But then they lost almost 20% in 2008. So now people talk about the uncorrelated returns hedge fund managers achieve....MORE
Taleb Makes Hyperinflation Bet and Why You Might Want to Be Skeptical
Gaming the System: Are Hedge Fund Managers Talented, or Just Good at Fooling Investors?
Eugene Fama: Do Active Managers Earn Their Fees?
Climateer Headline of the Day: Hedge Fund Spit Take Edition