While the markets, and consequently most mutual funds, had a pretty quiet first quarter of 2015, there was one surprise winner: hedge funds. For the first time since 2012, we had a quarter in which hedge funds, returning an average of 2.4 percent, outperformed the S&P 500, which returned about 1 percent.
That's a turnaround from 2014. According to Hedge Fund Research, the aggregate hedge fund returned just 3.3 percent last year, when the S&P 500 was up 12 percent. The 2.4 percent hedge funds brought back in the past quarter was actually their best single quarter since 2013.
Compounding that problem is the fact that hedge funds also charge higher fees than mutual funds. The average hedge fund charges a management fee of 1.5 percent of assets, plus 17.8 percent of all gains. That's a lot of money for not so much return.
No comments:
Post a Comment