Basically the title. Hedge funds underperform every year as compared to broader ETFs like S&P500 by more than 10%! Given this, who invests in hedge funds? Are they stupid or am I stupid?
[https://www.aei.org/carpe-diem/the-sp-500-index-out-performed-hedge-funds-over-the-last-10-years-and-it-wasnt-even-close/](https://www.aei.org/carpe-diem/the-sp-500-index-out-performed-hedge-funds-over-the-last-10-years-and-it-wasnt-even-close/)
In: 128
Because hedge funds are a different type of asset class compared to stocks…. you wouldn’t ask why people prefer us t bills to stocks, we understand that risk is rewarded in the market… hedge try to make alfa (non market risk) using any instrument that they are allowed by their investment charter while stocks and index make money on beta (market risk)… beta pays better than alfa but is also more risky
Latest Answers