Hedge Funds Vs. Indexing

Hedge Funds Under Perform Broad ETFs

Since the recovery began in the beginning of 2009, the Vanguard Total World ETF has outperformed the HFRX Global Hedge Fund Index, and by about 40%. Since 2009, the HFRX hedge fund index has only gained a total of 11.12% while the Vanguard Total Return ETF has returned more than 53%.

Niche Hedge Funds Make Exotic (and Risky) Investments

From Reinsurance to Electricity Arbitrage, Hedge Funds Seek Out Non-Traditional Investments

In an investment universe where low returns are seemingly everywhere, some hedge funds are making bets on exotic alternatives according to CNBC.com.  Rather than invest in traditional safe havens like US Treasuries or German Bunds, some hedge funds are making obscure bets such as electricity arbitrage, or Chinese companies that are the subjects of fraud investigations, as well as reinsurance and catastrophe bonds.

While higher returns are likely the main rationale behind these exotic hedge fund investments, many of them are also uncorrelated to bonds and equities and can provide some risky diversification.

UCITS Hedge Funds Continue Climb

According to HFM Week, The UCITS Alternative Blue Chip index is up 3.1% so far in 2012 and was up .31% for the first 15 days of March.  With two exceptions, the CTA and FX strategies, all sectors have positive returns on the year. 

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Bay Area "Hedge Fund" Charged With Fraud

 Founder of "purported hedge fund" Market Neutral Trading LLC Charged by SEC with Fraud.

James Michael Murray, a Bay Area "hedge fund manager" operating Market Neutral Trading LLC has been charged by the SEC with defrauding investors. According to the SEC, James Michael Murray used an "independent auditor" that was in fact merely a shell company he created. 

Murray, a Larkspur, California native, also reportedly invented fictional professionals on the "audit" company website. On wednesday, The U.S. Attorney’s Office for the Northern District of California also filed criminal charges against James Michael Murray. It's not clear if Market Neutral Trading LLC, based in San Francisco, actually conducted legitimate trading.

 Market Neutral Trading is based at 580 California Street 12th Floor, San Francisco, Ca 94104

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US Hedge Fund Assets Peak in 2011

US hedge fund assets peaked in September 2011, at just under $1.8 trillion.

Source: HedgeStats.com

Citadel Funds Finally Clear High Water Mark

Citadel Funds Finally Clear High Water Mark

Two of Citadel's flagship hedge funds, the Kensington and Wellington funds, can finally breathe as strong 2011 performances helped thm clear high water marks. Also breathing, the fund managers who can now begin earning performance fees once again. According to CEO Ken Griffin, "The world changed dramatically in 2008, and we adapted our capabilities and resources to successfully compete in this new environment.”


Source: NY Times

Hedge Funds Lose Assets to End 2011

Hedge Funds Lose Assets to End 2011

Hedge fund investors pulled more assets than they contributed in the 4th quarter of 2011, leading to $127 million in net withdrawals in Q4, 2011, according to Hedge Fund Research. Despite equity market gains int he 4th quarter, the unwillingness of hedge fund investors to deploy more capital may not bode well for hedge funds in 2012 as they face more withdrawal pressure.

Top 20 Largest Hedge Funds 2012

2012 - The 20 Biggest Global Hedge Funds
Here is a list of the top 20 hedge funds, along with their assets under management (AUM) as of the beginning of 2012:

Note: See the updated list of the Top 250 Hedge Funds 2017

1. Brevan Howard Asset Management (AUM= $61.5 billion)
2. Goldman Sachs Asset Management (AUM= $52.1 billion)
3. Landsdowne Partners (AUM= $36.4 billion)
4. BlueCrest Capital Management (AUM= $35.3 billion)
5. Och-Ziff Capital Management (AUM= $35 billion)
6. BlackRock (AUM= $29.6 billion)
7. Baupost Group  (AUM= $29.4 billion)
8. Moore Capital (AUM= $28.8 billion)
9. Renaissance Technologies (AUM= $26.5 billion)
10. Appaloosa Management (AUM= $24.6 billion)
11. Avenue Capital (AUM= $23.6 billion)
12. JPMorgan Asset Mangagement (AUM= $20.4 billion)
13. Fortress Investment Group (AUM= $19.9 billion)
14. Paulson & Co (AUM= $19.6 billion)
15. ESL Investments (AUM= $19.5 billion)
16. Soros Fund Management (AUM= $18.1 billion)
17. GLG Partners (AUM= $17.4 billion)
18. DE Shaw (AUM= $17.2 billion)
19. King Street Capital (AUM= $16.3 billion)
20. Bridgewater Associates (AUM= $15.6 billion)
Source: HedgeStats.com

Brevan Howard Asset Management ($61.5B) remains the world's largest hedge fund in 2012 with Goldman Sachs Asset Management ($52.1B) close behind. The top 5 hedge funds manage a combined $170 billion USD. The top 10 hedge funds manage $310 billion as of the end of 2011.