Friday, January 20, 2012

Analysis: The great hedge fund humbling of 2011 | Reuters

Analysis: The great hedge fund humbling of 2011 | Reuters:

"...was a humbling year for the $1.7 trillion hedge fund industry, with the average fund dropping 4.8 percent and some stock-focused funds suffering an average 19 percent decline, according to research compiled by Hedge Fund Research and Bank of America Merrill Lynch analysts.

Investors who sidestepped hedge funds and instead chose mutual funds fared much better. For example, the Vanguard 500 Index fund gained 2 percent, and PIMCO's StocksPLUS Long Duration Fund, 2011's best performing mutual fund, enjoyed a 21.2 percent return...."

Now any analysis of return without a mention of risk measures is incomplete, but this at least shows once again that hedge funds are not the automatic way to make money that many seemingly believed in only a few years ago.

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