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.