A Mystery in Hedge Fund Investing

When I look at hedge funds, there are three data points that keep bothering me. They create a pattern that doesn’t make a lot of sense. I hope you can help me understand what I’m missing.

1. Hedge fund performance has been terrible.

In 2014, the Barclay Hedge Fund Index returned 2.88 percent. In that same period, the boring Standard & Poor’s 500-stock index of larger American stocks gained more than 13 percent and the Barclay United States Aggregate Bond Index rose more than 5 percent.

I know, I know, that’s only one year. And one year doesn’t equal a track record. But how about a decade?

Read the rest of the article on The New York Times.