Based on a recent article in Forbes, we would like to share some of their observations on recent hedge fund performance. As the industry heads toward the homestretch for 2012, the numbers are grim. Bank of America Merrill Lynch’s investible hedge fund index shows hedge funds are up less than 2% so far in 2012 compared to an increase of more than 13% for the S&P 500.
Goldman Sachs recently put out a report showing that the average hedge fund is up 4.6% in 2012 and that only 11% of the hedge funds it tracks have beaten the S&P 500.
This is not particularly good news and suggests that 2012 is likely to be the second consecutive year of material underperformance. In 2011, the average hedge fund dropped 5% while the S&P 500 returned 2%.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA