Perhaps we’ve been too harsh. We often chastise investors for chasing returns instead of making investments most suitable for their overall portfolio needs and goals. After all, chasing returns, in our experience, and particularly in the hedge fund space, rarely pays, and adopts a very short-term perspective on long-term investing.
And yet… maybe it’s not just the investors that are to blame here. Maybe we’re back to the financial media getting it wrong. Just for a recent example, Barrons recently put out a list of the best performing hedge funds in the industry. Generally speaking, that might be useful for an investor, but the means to separate the mice from the men for Barrons was pure returns. Not an ounce of consideration was given to drawdowns or other risk metrics. Just returns. Just the very thing we tell investors to NOT do when they invest. Sorry, investors. Maybe we’ve been a bit too hard on you. After all, this is the mainstream guidance you’re receiving – we can’t fault you entirely.
(Source: Barrons. Click to Embiggen)
On a side note: Barrons, you completely dropped the ball on managed futures here. It cracks us up that so many financial journalists are quick to put managed futures in the hedge fund category, but in rankings like these… Let’s just say that 21 programs in our scrubbed CTA database would have been in the Top 100 of your rankings, with compound annual returns of over 16% in the last three years during one of the worst performance periods in the history of managed futures (Disclaimer: Past performance is not necessarily indicative of future results).
Seriously, guys. Get your story straight.
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
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