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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