If anyone could demonstrate expertise in “beating the market,” you would think it would be hedge fund managers. They get paid hefty fees (often 2 percent of assets under management plus 20 percent of profits) to generate “alpha.” Successful hedge fund managers make obscene amounts of money. The top hedge fund managers earned in excess of $1 billion in 2014.
Don’t get me wrong. I do believe they are among the savviest people in the universe. They have managed to persuade sophisticated pension plans, endowment funds and wealthy investors to entrust more than $2.6 trillion in assets to their management. This is quite an accomplishment, given their generally dismal record of underperformance. Let’s take a look at the data.
Read the rest of the article at The Huffington Post.