I mean SPY has returned like 3% YTD. But that’s not really the point. M&A has zero to very low Beta exposure, so it’s almost completely uncorrelated to the mark

I mean SPY has returned like 3% YTD. But that’s not really the point. M&A has zero to very low Beta exposure, so it’s almost completely uncorrelated to the market. This, in general, is a good thing. A lot of quant market neutral hedge funds only return 3-5% per year. Compared to the S&P, this looks pretty bad. But the goal of these funds isn’t to provide the best returns, it is to provide the best risk adjusted returns. You may ask, why would I care about that? The answer is that you can synthetically match any return by either buying or selling (borrowing) at the risk free rate. So if I had a fund that had returns of 4% and volatility of 2%, I could turn it into 2 and 1, 8 and 2, or 16 and 4, or whatever.