Hedge fund performance round-up: 2010

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The table below, courtesy of Econompicdata, summarizes the 2010 hedge fund performance data for various categories. As shown, the numbers were mostly very good – leaving aside the equity shorts. By means of comparison, the S&P 500 Index returned 15.1% for the year, the 10-year Treasury Note 4.3% and the Reuters/Jeffries CRB (Commodity) Index 17.4%.

Source: Econompicdata, January 10, 2011.

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3 comments to Hedge fund performance round-up: 2010

  • rich c

    I enjoy the e-mail blasts!!

    Respectfully, this seems to be grossly inaccurate. To the contrary, the average hedge fund (once again) has barely kept pace with its index and certainly so when considering the average leverage used by a hedge fund (additional link below).

    Hedge fund reporting is subject to a number of issues such as ‘survivor bias’ (funds that fail during the period cannot report) and inconsistent reporting. For example, many underperforming funds simply do not volunteer numbers. Additionally, this is a largely unregulated industry and some have been accused of cooking the books in terms of their financial reporting.

    Plus, considering the risk taken by the average hedge fund via the use of high leverage (down from prior periods but still upwards of 1.5x to 3.0x on average *), wouldn’t you think there should be commensurate returns versus an index, i.e., twice the risk, twice the return?

    P.S. I believe the S&P500 was up 12.7%, not 15.1%.

    * That’s the last numbers I’ve see. Would appreciate an update on that.

  • @rich: The S&P 500 number of 15.1% is the total return (capital growth plus dividend). You’re figure of 12.7% refers to the price movement, excluding dividends.

  • rich c

    Ahhh. Got it.

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