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Monday, September 18, 2017

In the No Surprise Department

from marketwatch

Hedge fund closures still outnumbered launches in second quarter

 
Hedge fund performance continues to lag the overall market, as measured by the S&P 500 SPX, +0.15% The HFRI Fund Weighted Composite Index is up 5.4% thus far this year (through the end of August), a gain that is less than half the 11.9% rise of the S&P.
While hedge funds are designed to do more than simply provide exposure to a particular market—for example, they can employ more complex instruments, like derivatives and leverage—investors have lately shown far more interest in broad-market funds that simply track a major index.
Beyond the fact that the S&P has long outperformed the average hedge fund—winning Warren Buffett a $1 million bet in the process—such products can be purchased for significantly less money. The average hedge fund management fee was 1.46% of assets in the second quarter, with the incentive fee coming in at 17.2%. To compare, an exchange-traded fund that tracks the S&P 500 can be had for as little as 0.04% of assets. 

1 comment:

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