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What Stocks Are the Big Hedge Funds Buying?

Despite their reputation for their investment prowess, hedge funds haven’t exactly set the financial world on fire over the past five years. As a recent Bloomberg article pointed out, hedge funds have underperformed the S&P 500 by 97 percentage points since the end of 2008.

Warren Buffett agrees.

In 2008, The “Oracle of Omaha” made a $1-million bet against the industry with hedge fund Protégé Partners. The terms were straightforward. Protégé Partners picked a group of hedge funds that it expected to outperform an S&P 500 index fund over the course of 10 years. According to Fortune, thanks to the huge run-up in the S&P 500 in the last few years, hedge funds are already getting trounced. And barring another market meltdown like 2008, they have little hope of catching up.

There are a couple of reasons for hedge funds’ poor showing.

Read more about hedge funds and how to know what they are investing in at Eagle Daily Investor.

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Despite their reputation for their investment prowess, hedge funds haven't exactly set the financial world on fire over the past five years.

archive

What Stocks Are the Big Hedge Funds Buying?

Despite their reputation for their investment prowess, hedge funds haven’t exactly set the financial world on fire over the past five years.

Despite their reputation for their investment prowess, hedge funds haven’t exactly set the financial world on fire over the past five years. As a recent Bloomberg article pointed out, hedge funds have underperformed the S&P 500 by 97 percentage points since the end of 2008.

Warren Buffett agrees.

In 2008, The ??Oracle of Omaha? made a $1-million bet against the industry with hedge fund Protégé Partners. The terms were straightforward. Protégé Partners picked a group of hedge funds that it expected to outperform an S&P 500 index fund over the course of 10 years. According to Fortune, thanks to the huge run-up in the S&P 500 in the last few years, hedge funds are already getting trounced. And barring another market meltdown like 2008, they have little hope of catching up.

There are a couple of reasons for hedge funds’ poor showing.

Read more about hedge funds and how to know what they are investing in at Eagle Daily Investor.

Newsletter Signup.

Sign up to the Human Events newsletter

Written By

Nicolas A. Vardy is the London-based International Economics Correspondent for Human Events.

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