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This company has ~$750mm under management, and has several funds that manage to have both a) high expense ratios and b) horrible performance over the short and
by runako 9y ago
This company has ~$750mm under management, and has several funds that manage to have both a) high expense ratios and b) horrible performance over the short and long terms.
Serious question, for those who work in finance: how do companies like this stay in business? Shouldn't the transparency of their poor performance have long since driven them out of business?
Semi-serious question, also for those who work in finance: what are the barriers to entry to starting funds for those of us who could do better than this guy?
Edit: I'm also stunned that anyone running any kind of "growth" fund could manage to lose money the last few years.
- vasilipupkin 9y agoHe may have raised funds 20 years ago and over 20 years delivered good returns. Also, underperforming S&P is not necessarily the right metric - as part of an overall portfolio that includes S&P, his funds may provide diversification benefits. To answer the question as to why can't random joe raise that money - the answer is, raising money is harder than you think.
- Luc 9y agoIt's not my area of expertise, but I believe it's perhaps easier to raise money now than at any time in the past. Somewhere in this video, David Einhorn talks about this in response to a question from the public: https://www.youtube.com/watch?v=Qvz5LS9pIjs https://www.youtube.com/watch?v=Qvz5LS9pIjs Apparantly there's match making events set up by banks, to introduce money managers to investors.
- aaavl2821 9y agoIt's a really hard time for long short hedge funds actually. There was a Bloomberg article a few months ago saying that the number of new l/s funds is the lowest it's been in years
- junkscience2017 9y agowith 5% fees, Hussman himself is making money! it's only the clients that are losing money he just has to produce doomsayer screeds that are convincing enough to fool the clients. he's basically being paid to write dystopian fiction
- rbcgerard 9y agonot sure where the 5% fees number is coming from, it looks like its <1.4%. If you're adding the redemption and exchange fees those are only applicable if you hold the fund for <60 days... https://www.hussmanfunds.com/pdf/hsgprosp.pdf https://www.hussmanfunds.com/pdf/hsgprosp.pdf
- rbcgerard 9y agogo on morningstar (or below) and look at the chart for the entire life of the fund, you'll see that he had periods of massive outperformance http://quotes.morningstar.com/chart/fund/chart?t=HSGFX®ion=usa&culture=en-US&dataParams=%7B%22zoomKey%22%3A10%2C%22version%22%3A%22US%22%2C%22showNav%22%3Atrue%2C%22defaultShowName%22%3A%22name%22%2C%22mainSettingId%22%3A%22main%22%2C%22navSettingId%22%3A%22nav%22%2C%22benchmarkSettingId%22%3A%22benchmark%22%2C%22sliderBgSettingId%22%3A%22sliderBg%22%2C%22volumeSettingId%22%3A%22volume%22%2C%22defaultBenchmark%22%3Afalse%2C%22id%22%3A%22FOUSA00ATX%7C%24FOCA%24LO%24%24%7CXIUSA04G92%7CXIUSA00118%22%2C%22type%22%3A%22FO%7CCA%5DFO%7CXI%7CXI%22%2C%22region%22%3A%22USA%22%2C%22name%22%3A%22XNAS%3AHSGFX%7C%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20Long-Short%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%7CIXUS%3ASPYZ%7CIXUS%3A%24MGROT%22%2C%22baseCurrency%22%3A%22USD%22%2C%22defaultBenchmarks%22%3A%5B%22%24FOCA%24NE%24%24%7CMarket%20Neutral%7CCA%5DFO%22%2C%22%22%5D%2C%22chartType%22%3A%22growth%22%2C%22startDay%22%3A%2207%2F24%2F2000%22%2C%22endDay%22%3A%2212%2F21%2F2017%22%2C%22chartWidth%22%3A955%2C%22SMA%22%3A%5B%5D%7D http://quotes.morningstar.com/chart/fund/chart?t=HSGFX®io...
- solotronics 9y agoa broken clock is right twice a day
- c3534l 9y agoThat looks a lot more accurate than twice a day.
- chickenfries 9y agoFor a decade?
- icebraining 9y agoIt's probably a stupid question, but doesn't that ignore the dividends?
- 9y ago
- aaavl2821 9y agoFunds like this tend to outperform in bad to normal markets and underperform in highly bullish markets as they have more discipline around valuation. Warren Buffett famously underperforms in very bullish markets as well The pitch of funds like this is that for a few years out of 10, they'll underperform, and then massively outperform when everyone else is sucking. People invest in funds like this (note I don't know too much about his fund in particular but know many funds with similar styles) because when all the people who think they are expert investors bc they rode a bull market crash, these funds will be making lots of money
- dmoy 9y agoUnderperform sure, I get that. Negative performance, when you're getting like >15% s&p 500 growth for year after year? If that's what GGP is saying that's really bad.
- b4lancesh33t 9y agoBut it didn't outperform in 2008. At least not by much.
- kgwgk 9y agoLosing 9% instead of 37% is quite some outperformance. Let’s say you started with $100: ending with $91 is 44% more than ending with $63.
- deleted 9y ago[deleted]
- icedchai 9y agoA few years seems reasonable. However, they seem to underperform for most years out of 10. This is their best performing fund: https://www.hussmanfunds.com/strategic-total-return-fund/ https://www.hussmanfunds.com/strategic-total-return-fund/ On the other hand, this is their "growth" fund: https://www.hussmanfunds.com/strategic-growth-fund/ https://www.hussmanfunds.com/strategic-growth-fund/ Its performance is absolutely abysmal. What is Hussman's "PhD" in? Losing money?
- dsr_ 9y agoNever underestimate the role of salesmanship in the success of convincing people to give you their money.
- matwood 9y agoFor some people a fund that only does well in bad times is their hedge. You just have no way of knowing who this funds clientele is.
- FabHK 9y ago> I'm also stunned that anyone running any kind of "growth" fund could manage to lose money the last few years. Well, he's bearish, so he's only moderately long, if at all, and spends money on downside protection. That bleeds.