5 January 2011

Hedge Funds return 4.52 % in 2010

Given that low transparency and high fee structures present investors in hedge funds with an uphill struggle this performance is nothing to be proud of. A sometimes high risk profile makes it even more imperative that hedge funds offer a superior investment return to compensate for these drawbacks. Of course, there are exceptional performers, but there will always be some funds that - due to luck or skill - will perform better than the average. Even claims of actual past outperformance have to be taken with a (large) pinch of salt as research shows that a superior performance record can statistically be attributed to skill and not luck only on the basis of a performance history of at least 15 years. PBA advises to follow a well-balanced investment strategy that does not neglect cost and risk at the expense of sometimes elusive performance predictions.