The Tide May be Turning: The Improving Outlook for Hedge Funds

Hedge funds have disappointed investors for almost a decade; even before accounting for fees and taxes, results have trailed a traditional 60 equity/40 bond balanced portfolio over the 10-year period ending in December 2018. A number of large institutions announced their intentions to move away from hedge funds, fed up with subpar results and high fees. A flurry of financial articles has highlighted the ongoing performance problems and closures of several high-profile funds. But after years of disappointment, we now believe that the environment for truly talented hedge fund managers is improving, allowing them to once again positively contribute to portfolio performance.