Friday, June 14, 2013

Hedge fund gains may not be what they seem




Financial News’ Harriet Agnew reports:  Hedge fund performance data published this week by JP Morgan prime brokerage appears to show that the sector outperformed domestic and international equities, commodities and fixed income during the 16 years from 1997 through 2012.

But there are several reasons why this chart may exaggerate the actual performance of hedge funds.

For example, at the end of 2007, the hedge fund industry ran almost $1.9 trillion in assets. So its 19% performance loss the following year would have wiped roughly $360bn off the industry’s asset base. A time-weighted series ignores this….


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