Hedge Funds Trail S&P500 By 22 Points

Dec 6 2013 | 2:14pm ET

By at least one measure, 2013 is set to be the hedge fund industry's worst in at least eight years.

The average hedge fund isn't going to suffer double-digit losses like those seen in 2008. Instead, it is trailing the broader markets by the largest margin since at least 2005.

According to Bloomberg News, the average hedge fund is up 7.1% through the end of November. That's a whopping 22 percentage points behind the Standard & Poor's 500 Index, which is up 29.1% with reinvested dividends.

It will be the fifth year in a row that hedge funds have trailed the S&P500. Indeed, hedge funds haven't beaten the benchmark since 2008, when they lost only about half as much as the broad stock index.

The Bloomberg Global Aggregate Hedge Fund Index, which rose 0.2% last month while the S&P500 rose 2.8%, has only been around since 2005. Longer-lived hedge fund benchmarks like Hedge Fund Research's HFRI suite show that this year will be the industry's worst since 1998, when it trailed the S&P500 by 26 percentage points.


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...