25 December 2010

Hedge Fund Performance - nothing to write home about

Morningstar reports that the average hedge fund was up 6.12 % for the year through November 30. Most performance numbers for Hedge Funds are difficult to interpret even for market professionals and the headline numbers in isolation are basically meaningless as there is no clearly defined yardstick against which to measure it. 6 pct compared to what? how was it achieved? what risks have been taken? Investors are strongly advised not to fall for simplistic sales patter.