Hedge Funds Fail Across Asset Classes

Hedge funds began this year coming off their seventh-straight year of trailing U.S. stocks (as measured by the S&P 500 Index) by significant margins. What’s more, for the 10-year period ending 2015 (one that included the worst bear market in the post-Depression era), the HFRX Global Hedge Fund Index managed to return just 0.1% a year, underperforming every single major equity and bond asset class.

Unfortunately for hedge fund investors, so far 2016 has not been kind. The bottom line for hedge funds is that their negative performance streak has continued into an eighth year. The HFRX Global Hedge Fund Index gained just 1.1% through September, underperforming nine of the 10 major equity asset class indexes as well as five-year Treasury notes and 20-year Treasury bonds.

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