| Whenever the topic of index funds come up, people should remember: 1. The benchmark for hedge funds is not the sp500, it’s the bond market 2. Because the sp500 is inherently a bet, that America’s top few companies will perform well. This is not a purely risk free, hands off bet. If you bought the Japanese Index fund, the Nikkei, even today it hasn’t returned to its 1980 peak You might say “I’ll just get a global index”- in which case congrats, you’ve underperformed hedge funds! 3. There are more factors than just investment returns- ie volatility (Sharpe), drawdowns, etc So despite what HN seems to think, the hedge fund industry is not in fact, full of idiots. |
There is not _a_ benchmark for "hedge funds" as they are not really _a_ thing.
In some cases S&P 500 may be an appropriate benchmark. Unless Bill Ackman is not a true hedge fund manager, I guess. "In 2023, Pershing Square’s 20th year, Pershing Square Holdings generated strong NAV performance of 26.7% versus 26.3% for our principal benchmark, the S&P 500 index."