US: Hedge funds – rentiers or warriors?
April 16, 2012
The disappointment or even disgust many investors feel is not just about losing money, or about losing money in a flat year. It’s the kind of repulsion one would have at seeing a police officer run screaming from a gunfight
DATA INCLUDES: US hedge funds at a glance, assets, new funds, median performance
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Josh Friedlander, online editor, AR
That sound you hear is of a few thousand investors wringing their hands over last year’s widespread losses. In the Americas, 56% of hedge funds in our database lost money in 2011, falling an average of 1.59%.
The biggest names in the industry, despite all their theoretical advantages, did almost as badly, with the funds in AR’s Brand Names list losing an average of 1.82%. Meanwhile, the correlation of hedge fund returns to the markets hit an all-time high, with US funds 89% correlated to the S&P 500 Index, up from a five-year average correlation of 76%. But bad timing and conservative positioning – less leverage, more cash and fear of shorting into rallies – left many hedge funds trailing the indices.
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