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Whenever the topic of index funds come up, people should remember: 1. The benchmark for hedge funds is not the sp500, it’s the bond market 2. Because the sp50
by deepnotderp 2y ago
Whenever the topic of index funds come up, people should remember:
1. The benchmark for hedge funds is not the sp500, it’s the bond market
2. Because the sp500 is inherently a bet, that America’s top few companies will perform well. This is not a purely risk free, hands off bet.
If you bought the Japanese Index fund, the Nikkei, even today it hasn’t returned to its 1980 peak
You might say “I’ll just get a global index”- in which case congrats, you’ve underperformed hedge funds!
3. There are more factors than just investment returns- ie volatility (Sharpe), drawdowns, etc
So despite what HN seems to think, the hedge fund industry is not in fact, full of idiots.
- santoshalper 2y agoI don't think most of us think the hedge fund industry is full of idiots. Speaking only for myself, I think it's mostly full of grifters.
- kgwgk 2y ago> 1. The benchmark for hedge funds is not the sp500, it’s the bond market There is not _a_ benchmark for "hedge funds" as they are not really _a_ thing. In some cases S&P 500 may be an appropriate benchmark. Unless Bill Ackman is not a true hedge fund manager, I guess. "In 2023, Pershing Square’s 20th year, Pershing Square Holdings generated strong NAV performance of 26.7% versus 26.3% for our principal benchmark, the S&P 500 index."
- deleted 2y ago[deleted]