The Vanguard 500 Index Fund (VFINX) has existed since 1976.
Kenneth French (the "French" in the Fama-French asset pricing model) provides market data going back to 1972 [1] and can be used to reconstruct index fund performance.
Citadel doesn't have individual clients, and if you're not a billionaire I don't see how you'd gain access to their hedge fund.
Huh? The first index fund was started 45 years ago, and indexes existed and are tracked far longer than that. Tell me what percentage of hedge funds beat the S&P over the last 50 years?
If you cherry pick the US S&P (over international, and over small cap), I’m allowed to cherry pick hedge funds.
Many funds consistently outperform the S&P by 2-3X over 30-40 years. Minimum investment, $5-10M, of course.
Buy and hold is the best option for those under USD $10 million net worth, but you must acknowledge there are semi-closed funds/prop trading firms that consistently beat the market.
Stop being poor so you can go into those badass hedge funds that always beat the S&P 500 /s
But seriously, I'd rather just put money into VTI and VXUS and go back to playing video games, planning a D&D one-shot, programming a bit, or hanging out with friends in my spare time. Let the active traders waste their time poring over 10-Ks and/or charts. I'll be here having fun and taking what the market gives.
> Yes, just like there are individual stocks that beat the market. How do you pick them?
The same way you picked your passive index fund: look at 20-30+ years of data.
Unfortunately, VTI, VT, VOO all underperform the top hedge funds, when evaluated over 20 years (risk adjusted return, downside deviation, and absolute return). I’d go further back but VTI was created in 2001 whereas the hedge funds were created in 1980/1990.
I picked S&P because it's one of a handful of widely reported indices and it was created roughly in the same era as the original vanguard index fund, not by cherry-picking data.
Your statement that major index funds all underperform the top hedge funds is tautological, of course the ones that beat the averages are the top funds. What I'm genuinely curious is: how many hedge funds were there in 2001 and how would you identify the top ones?
What percentage of hedge fund clientele exclusively invested in a single hedge fund 50 years ago? Many index fund evangelists focus on that assumption. It’s a strawman.
You can invest actively and intelligently. For example, my 401k offered an emerging markets fund (MGEMX) that isn’t the ideal fund from a cost structure perspective... but it performed really well for a few years. It wasn’t speculation or reckless behavior to have exposure to that sector. Portfolio rebalancing booked my gains when it was rising 30%, and I ended up doing well when 2008 killed that sector.
That doesn’t mean buy and hold doesn’t make sense either. If I was lucky and held on to an early fun money Bitcoin buy I’d be on an island right now!
The most popular index funds (VTI, VGT) only have a 20-year track record, with a paltry 9% and 13% annual return, respectively.
[1] https://www.clearbrookglobal.com/citadel-millennium-d-e-shaw...