Hedge fund returns average the same as passive equity
Implies that you should never invest in a hedge fund, because it's possible that they have individual characteristics which mean that they're more or less likely to fail, which you could notice when you invest. eg. Management is obviously incompetent, no track record, incoherent strategy, track record based on being long in a rising market etc.
If you believe that's the case, then you might still get above average returns by doing your homework.
But I guess given that assumption, still only worth it if you have enough money that you're completely able to lose that it's worth you spending the time to try and work out which hedge fund you trust (easier than spending your working days trading yourself).
So if you're an educated hnwi, maybe. If the chain is like you => your employer => your pension fund => some advisor => hedge fund, I'd guess not.
I don't have any evidence for this it's just what I believe.
Depends you might want to preserve capital and not try and shoot the lights out and use a hedge fund /active fund that is designed to do that RCP in the uk is one example.
Hedge fund returns average the same as passive equity
Implies that you should never invest in a hedge fund, because it's possible that they have individual characteristics which mean that they're more or less likely to fail, which you could notice when you invest. eg. Management is obviously incompetent, no track record, incoherent strategy, track record based on being long in a rising market etc.
If you believe that's the case, then you might still get above average returns by doing your homework.
But I guess given that assumption, still only worth it if you have enough money that you're completely able to lose that it's worth you spending the time to try and work out which hedge fund you trust (easier than spending your working days trading yourself).
So if you're an educated hnwi, maybe. If the chain is like you => your employer => your pension fund => some advisor => hedge fund, I'd guess not.
I don't have any evidence for this it's just what I believe.