Hedging on the Case Against Hedge Funds


Opinions of hedge funds always seem to be unhedged and occasionally unhinged. In the distant past, opinions were too positive. The media focused on stories of outsized success. Big winners were lionized. Failures were castigated, but not allowed to spoil the narrative.

Everyone wanted in. Many investors assumed hedge funds offered either very high returns or diversification with modest but consistent returns uncorrelated to the rest of their portfolio. Back then I was one of the early critics arguing that hedge funds, as a group, were too correlated to markets and charged investors too much. I haven’t changed my views. But the pendulum has swung and all you read about today is that hedge funds are a failure and investors are fleeing. What was once right is now being taken too far…

Hedging on the Case Against Hedge Funds

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