Bad Returns At Hedge Funds

Hedge funds, the institutions that are supposed to deliver significant returns across all sorts of different market cycles, had a not so stellar 2011.  In one sense that may have been understandable since the markets were punk late in the year.  However, turns out that in a pretty good market, their aggregate returns continue to stink up the joint.  Go read this article from Covestor "Hedge Funds are Having Another Terrible Year".   Here's the main part:

"The latest reading from Bank of America Merrill Lynch’s investible hedge fund composite index finds that hedge funds are up just 1.85% so far in 2012, while the S&P 500 has rallied to gain nearly 12% over the same period. A separate tally from Goldman Sachs shows that the average hedge fund is up 4.6% so far in 2012, and that only 11% of the hedge funds it tracks have beaten a low cost S&P 500 index fund."

Remember these are the folks that generally get paid a 2% fee plus 20% of the profits.

*Long ETFs related to the S&P 500 in client and personal accounts.