2015 is already shaping up like another painful year for the vast majority of hedge funds, most of which enter the year the way they did 2014: short bonds and long the S&P (with lots and lots of leverage, and hoping to get paid 2 and 20 for doing something any regular investor can do with 2 ETFs while paying neither 2 nor 20), which means that the vast majority will again barely return anything in the green column, let alone generate alpha. As Bloomberg reminds [3]us, "hedge funds as a group had a horrendous 2014, with an average return of just 1.6 percent through October among the 2,400 funds that make up the Bloomberg Global Aggregate Hedge Fund Index."
Until October, managers complained that volatility in stocks and bonds made it tough to make money. Then, many got spooked and sold during October’s plunge, missing a quick profit as prices rebounded.
Trading value added indeed: now go buy a Hamptons mansion.
But not everyone was hopelessly clueless: some did quite well. Courtesy of Bloomberg, below is a list of the 100 Top-performing large hedge funds:
[4]
Here are the Top 20 most profitable hedge funds:
[5]
Most strategies employed by hedge funds were a miserable failure. Here are the best ones:
[6]
And finally, the biggest - for now - hedge funds:
[7]
Source: Bloomberg [3] [3]