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Hedge funds - the wrong kind of market
July 30, 2010
Lunch with a fund-of-hedge-funds manager today who tells me the industry is having a very difficult year. That is even true of managers who were able to ride out the problems in 2008 and take advantage of the rally in 2009.
Figures from Hedge Fund Research bear this out. The average fund lost 0.2pc in the first half and the average fund-of-funds 1.4pc, reflecting the extra layer of fees they charge. The main successes were in the fixed income sector but even here most funds lagged the Barclays government/credit bond index.
The problem, according to my host, has been the swings in trend. In 2008, you were OK as long as you were able to switch to a bearish tack and in 2009, the key decision was to join the rally after it began in March.
Original Posting At: Economist
Figures from Hedge Fund Research bear this out. The average fund lost 0.2pc in the first half and the average fund-of-funds 1.4pc, reflecting the extra layer of fees they charge. The main successes were in the fixed income sector but even here most funds lagged the Barclays government/credit bond index.
The problem, according to my host, has been the swings in trend. In 2008, you were OK as long as you were able to switch to a bearish tack and in 2009, the key decision was to join the rally after it began in March.
Original Posting At: Economist
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