Monday, August 12, 2013

Hedge Funds And S&P 500 Nearly Identical - Business Insider

Hedge Funds And S&P 500 Nearly Identical - Business Insider:

This one surprised me.  I was expecting the normal "Hedge funds don't outperform" article but this is much better.  It shows that hedge funds while not outperforming indexes, have (on average) had lower risks.

A look in:

" ...the path of achieving the 8.6% return would have been dramatically different between these two. The monthly return volatility for the S&P500 is nearly double that of the hedge fund index. And while the correlation between the two indices is almost 0.6, the beta of the hedge fund index has consistently been low - about 0.33 over the 20 year period."
I definitely recommend clicking through and seeing the charts.  They do tell a story that is often forgotten when only returns are considered.
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