A Tipping Point For Hedge Funds

In 2014, the HFRX Global Hedge Fund Index lost 0.6 percent, underperforming the S&P 500 Index by 14.3 percentage points. And while the index outperformed foreign equities, which generally lost between about 2 and 5 percent, it underperformed virtually riskless one-year Treasury notes, which returned 0.2 percent. It also underperformed a typical, globally diversified and balanced portfolio allocated 60 percent to stocks and 40 percent to bonds.

Over the long term, the evidence is even worse. For the 10-year period from 2005 through 2014—which includes the worst bear market in the post-Great Depression era—the HFRX index returned just 0.7 percent per year, underperforming every single major equity and bond asset class. The table below shows returns to various indexes.

Read the rest of the article on ETF.com.

©2024 Sawyer Capital Management

Sawyer Capital Management, Inc. is a registered investment adviser with the state of Missouri, Louisiana & Texas and may only transact business with residents of those states and residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements.