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The ETF Investor

Think your investment performance can't beat the performance of a hedge fund? Think again. Hedge funds have underperformed the S&P 500 for the past several years, and 2014 continued that streak.

 

The chart below from ZeroHedge tracks the hedge fund industry's returns (shown in blue), as measured by the Bloomberg Global Aggregate Hedge Fund Index, since 2008. Not surprisingly, hedge funds fared much better than the S&P 500 during the financial crisis as they utilized shorting opportunities, but that was only one year of the last seven.

 

 

 

 

 

2014 has actually been one of the worst years ever for hedge funds as the average firm posted negative returns through mid-November, barely pulling out a positive 1.6% gain by the end of the year, and underperforming the S&P 500 by almost 10%.

 

How bad has it been?

 

Bloomberg reports, "Hedge funds are shutting down at a rate not seen since the financial crisis, as many managers ... Log in or subscribe to continue reading.


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