It was another embarrassing year for Wall Street’s ‚ÄúMasters of the Universe.‚ÄĚ According to HFR, the average hedge fund investing in stocks gained 15% in 2013. Across all strategies, hedge funds returned an average 9.3%. Global Macro investing — the granddaddy of all hedge fund strategies — had yet another subpar year, losing 0.3% on average.
However you slice and dice it, it is egg on the face of the entire industry. By simply being ‚Äúdumb and long,‚ÄĚ the S&P 500 made 32%.
2013: It Was Not a Good Year
For hedge fund managers raised on the mother‚Äôs milk of diversification and trend following, 2013 was one of the worst years on record, compared to simple ‚Äúlong-only‚ÄĚ strategies.
Read more about why hedge funds underperformed in 2013 at Eagle Daily Investor.