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Not defending this fund or any other hedge and I do not know the defined purpose of this fund but they generally exist to hedge your risks and are not there to
by infecto 3y ago
Not defending this fund or any other hedge and I do not know the defined purpose of this fund but they generally exist to hedge your risks and are not there to beat the S&P500. Thats why they exist for accredited investors and not your regular investor saving for retirement.
- JackFr 3y agoIm pretty sure they exist to beat the market. They are called “hedge funds” because, as opposed to other stock funds they were allowed to take short positions while mutual funds could not, and so they could hedge some of their risk.
- ITB 3y agoIf a hedge fund returns a bit under SP500 on average but is more predictable and always has a positive return, it will definitely be desirable.
- CPLX 3y agoEven if it’s not predictable and is occasionally negative it’s still really valuable if it’s totally uncorrelated.
- bluedevil2k 3y ago> always has a positive return Not possible. Even the greatest mutual fund manager in the history of the world, Warren Buffet, has beat the market only 39 out of 58 years.
- renewiltord 3y agoWell, it's close to possible since Rentec did it for decades.
- phyalow 3y agoLookup TGS Management, there are many others out there…
- JackFr 3y agoYou can trivially create that with a portfolio split between T-bills and the S&P.
- infecto 3y agoYes but what market? That was my point, nothing to do with why they are named as they are. Sure, many in the 2-20 bubble had this weird existence where they did not really do much but in general its hard to make a statement about their AUM and returns compared to the S&P500 without know what they were trying to achieve.
- brianmcc 3y agoYes in the early days, less so now: https://en.wikipedia.org/wiki/Hedge_fund#Etymology https://en.wikipedia.org/wiki/Hedge_fund#Etymology "Early hedge funds sought to hedge specific investments against general market fluctuations by shorting the market, hence the name. Nowadays, however, many different investment strategies are used, many of which do not "hedge" risk."
- JumpCrisscross 3y ago> many different investment strategies are used, many of which do not "hedge" risk." They're still not generally designed to beat the S&P 500, always.
- infecto 3y agoFair if we want to go down the "hedge" approach. My point still stands, they don't all exist to beat the s&p500.