Real Reason Hedge Funds Had A Bad 2012: ‘Crowded Trade’ And Logic 101

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HFA Staff
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Hedge funds

Hedge performed exceptionally well this year (2013), compared with last year’s performance. Since the recent release of a report which put the yield of the average fund at 8.1%, many analysts have been looking at the returns and trying to figure out why managers are doing so poorly, and why people are still attracted to the products. When funds lost, on average, 4.8% in 2011, similar questions were being asked. The S&P 500 lost around 0.2% that year. So why are hedge funds performing so poorly, and why are people investing in them in greater and greater numbers? We can…

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The post above is drafted by the collaboration of the Hedge Fund Alpha Team.