Hedge Fund Reader : Hedge Funds Index Posts Meager Gains

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January 04, 2006

Hedge Funds Index Posts Meager Gains

If you have been nurturing the notion that hedge funds world over are minting money, then you need a reality check. A look at the Standard & Poor's hedge fund index figures will surely prove to be an eye opener. The index posted gains of just over 2.4 percent in 2005. This is not the only year when the actual performance of the hedge funds was far below the mythical levels. Even in 2004, the hedge funds index posted lackluster figures, with meager gains of 3.6 percent. A comparison with the S&P 500 index reveals that the hedge funds index performance was about half of the S&P 500. usnews reports:

That track record hasn't hurt the earnings of the average hedge fund manager, who took home about $1.2 million in 2004. But with the number of hedge funds--thinly regulated investment pools for the well-to-do--having mushroomed from a few hundred to more than 8,000 worldwide, with combined assets now around the $1 trillion mark, many investors are finding that storied hedge fund edge elusive.

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January 4, 2006 in Research | Permalink