S&P 500 Total Return vs. BarclayHedge Hedge Fund Index Hedge funds have underperformed the S&P 500 over the past decade, but volatility has been lower. Image: The Daily Shot – The Wall Street Journal, Bloomberg
S&P 500 Hedge Fund Long Positioning Speculative long positions in the S&P 500 are near levels that have marked major bottoms in the past. Image: Macro Ops
Hedge Fund Equity Exposure Great chart showing that hedge funds’ equity exposure is near their lowest since the global financial crisis. Image: J.P. Morgan
Hedge Fund Gross and Net Leverage Despite the trade war, hedge fund leverage remains high, compared to the average level of the last five years (aggregated data from Goldman Sachs Prime Services, as of August 19, 2019; should not be relied upon as a comprehensive view of the market). Image: Goldman Sachs Global Investment Research
Hedge Fund Portfolio Density and Turnover Hedge fund portfolio density has steadly increased, and fund turnover has declined over the past decade. High concentration risk can lead to high losses and affect the financial system. Image: Goldman Sachs
S&P 500 and Hedge Fund Exposure While the S&P 500 is at all-time high, hedge funds increase their exposure to equities (last = 0.52). Image: Sentimentrader
Performance of Hedge Fund Index vs. S&P 500 Hedge fund returns have not been as good as those of the S&P 500, but volatility has been lower. Image: Richardson GMP
Hedge Fund Industry Outperformance – Negative over Past Decade The chart below shows how it’s hard to beat the market over time. Image: Greenline Partners LLC
Estimated Number of Hedge Funds Launched or Closed since 2008 Can hedge funds deliver higher returns than passive investing? Not really. But many investors still think they can achieve higher returns with active trading than with passive investing. The chart below shows that it is really hard to outperform the market. As Warren Buffett said,…
“Hedge Funds Are Shorting the VIX at a Rate Never Seen Before” -Bloomberg This certainly won’t not end well. Why do we never learn some lessons and repeat the same mistakes? Image: Hedgeye Risk Management LLC
