likely most run of the mill working class & retired on social security pension folks don't qualify to participate, either they are not accredited investor, are not welcome or cannot stand the risk even the with the so called best performing hedge funds that take the cream - win or loose (making sure they feed themselves first) with up front fees & large percentage of profits. so what is it about hedge funds, are they better than a DIY investor, indices ETF, even folks that use a financial advisor ... can they an hedge fund beat the index year over year for what it returns to its clients? I have been looking to find the top 10 hedge funds performance of the past 10 years to Y/E 2019 ... jump in, comment, post your views, opinions, POV welcome. anyone care to find a list of performance returns for the top 10?
They can trade instruments a single trader cant (f.e. MBS) and some of them have complex models what to invest to, that are more complex then to be built by a single man. They can also afford to build HFT algos. Or they can focus on having fundamental insights int equities or futures (i know a firm that measures with satelites in which regions of the world how much oil is stored and then make predictions about the price). Thats the advantages a hedgefund can provide but I don't know any who makes more then 10% yoy after fees on a regular basis
@Genevian Speculator, thanks for that & holy crap ... definitely beyond my 'not as smart as a 5th grader' knowledge. It's mind boggling on the cost of such an operation. Then with all those tools using OPM you're figuring 10% yr returns. Again asking, appreciate If anyone has the stats on the 10 year YOY performance of the top 10 hedge funds?
Key is that hedge funds are not as heavily regulated. They have the freedom to speculate in riskier stuff, like BB and below rated junk bonds. They can take short positions, deal in foreign instruments, leverage up more, deal with mortgages based on lower credit scores, trade credit default swaps (big one now!!) etc. Stuff that a typical mutual or pension fund is forbidden.