And more against market timing (from Morning Brew today. lesson to be learned? Stick with index funds and stop trying to find the magic):
Good News/Bad News: Hedge Fund Edition
Let's start with the good news for hedge funds: They raised a record $28 billion for new launches in the first half of this year, according to Absolute Return.
Plus, hedge funds usually shine when markets turn volatile. Seems like 2018 would be a boom, then, given that the market has seen the most big intraday swings in a single year since 2011.
But here's the bad news: The $3.24 trillion industry just isn't making much money. In fact, hedge funds have fallen behind lower-cost passive investment products over the last decade.
The average hedge fund lost 2% through November of this year, compared to a 3.24% gain in the S&P 500.
Adding insult to injury, hedge funds suffered their worst monthly performance in three years in October, down 2.35% on average.
Bottom line: Volatility should have boosted hedge funds, but they're now on track for their worst year since 2011.