What % of hedge funds make money? Are SOME really as clueless as retail?

Discussion in 'Trading' started by iamnewuser911, May 24, 2018.

  1. What % of hedge funds make money over time and how many close down within a year or 5 years? What are some interesting statistics?
     
  2. Xela

    Xela


    There's an enormous range of often hugely conflicting statistics available (mostly because the term "hedge fund" can be defined in many different ways - what's your definition of it? :sneaky: ).


    Here are some statistics that might interest you (it's not necessarily an "objective source", but what is?).



    I think that if you define "clueless" solely with hindsight, self-definingly, i.e. according to their results, some are arguably as clueless as some retail traders; yes. On any other definition of "clueless", I'd think the answer's probably "no", myself.
     
    Last edited: May 24, 2018
  3. newwurldmn

    newwurldmn

    It's actually very difficult to start a hedgefund. A fund needs AUM to live and without enough AUM they can't maintain their expenses. That's why most funds fail. Some blow up and some meager returns, but in the end it's really about AUM. If you can't raise it, you die.
     
    tommcginnis likes this.
  4. Handle123

    Handle123

    I think too many going into starting a hedge fund have it wrong by thinking they have an idea and money will just flow into their hedge funds. If more funded it themselves or actually made 10-30 million on their own funds, shown low drawdowns and smooth equity curve-guess what, do you think they have any problem finding money?
     
    beginner66, Lou Friedman and fan27 like this.
  5. truetype

    truetype

    Assuming you actually care enough to do the work... Look up the industry indices to get returns over the X-year horizon of interest, use some reasonable approximation for the dispersion of the underlying managers, and take the area under the bell curve.
     
  6. zdreg

    zdreg

    these figures like statistics for mutual fund performance have a survival bias as defunct ones are no longer included.

    buy and hold strategies because of friction costs resulting from trading will out perform the hedge fund industry over intermediate and long periods of time.
     
    Last edited: May 24, 2018
  7. truetype

    truetype

    The reputable indices are bias-free. Do your homework.
     
  8. zdreg

    zdreg

    " do your homework." that is a snake oil salesman response
     
    schweiz likes this.
  9. zdreg

    zdreg

    again you make a snake oil man response.
     
  10. zdreg

    zdreg

    do some work before spewing your usual dribble. you are on ignore.
    Survivorship Bias - Investopedia
    https://www.investopedia.com/terms/s/survivorshipbias.asp
    Investors in the fund are immediately impacted by a fund closing. ... Morningstar is one investmentservice provider that regularly discusses and reports on survivorship bias. It can be important for investors to be aware of survivorship bias because it may be a factor influencing performance that they are not aware of.

    Survivor Bias and Mutual Fund Performance | The Review of Financial ...
    https://academic.oup.com/rfs/article/9/4/1097/1580100
    by EJ Elton - ‎1996 - ‎Cited by 660 - ‎Related articles
    Jun 3, 2015 - The subject of mutual fund attrition and the effect of survivorship bias on performancehas only recently begun to receive attention in the ...
    Prior Estimates of ... · ‎Analysis · ‎Characteristics of Funds ... · ‎Survivorship Bias and ...
    Survivorship Bias - Index Fund Advisors, Inc.
    https://www.ifa.com/articles/survivorship_bias_things_are_not_as_good_as_they_look/
    May 11, 2013 - Survivorship bias is when mutual fund managers tout their fund's performancebased on comparisons with an “average” mutual fund. This average is calculated from a list of fundsthat have survived during a particular period. Funds that did not survive the period are not included in the calculation.
    How Survivorship Bias Happens: Adjusted Fund Rankings
    thebamalliance.com/blog/how-survivorship-bias-happens-adjusted-fund-rankings/
    Oct 2, 2017 - How survivorship bias happens: Larry Swedroe adjusts the rankings for ... on active management, and also mutual fund performance rankings, ...
    [PDF]Survivorship Bias and Mutual Fund Performance - Semantic Scholar
    https://pdfs.semanticscholar.org/f95a/3cf42f87b0becfc0f16896b6c4924cae39c4.pdf
    by M Rohleder - ‎Cited by 55 - ‎Related articles
    Survivorship Bias and Mutual Fund Performance: Relevance, Significance, and Methodical Differences. Martin Rohleder. +. Hendrik Scholz. ++. Marco Wilkens.
    CFA Digest : Survivorship Bias and Mutual Fund Performance | CFA ...
    https://www.cfapubs.org/doi/full/10.2469/dig.v27.n3.137
    Excluding portfolios no longer under management from performance results introduces survivorship bias, which results in over-stating returns that investment ...
    When It Comes to Fund Performance, History Is Often Written by the ...
    https://www.wsj.com/articles/SB10000872396390444025204577545460615317218
    Aug 6, 2012 - Trailing returns for mutual-fund categories can be inflated by something the industry calls survivorship bias. Those averages reflect only those ...
    Survivorship Bias: Why Most Investors Should Own Index Funds ...
    https://www.barrons.com/.../survivorship-bias-why-most-investors-should-own-index-...
    Feb 3, 2014 - Survivorship Bias: Why Most Investors Should Own Index Funds ... after all, that these funds will deliver average-or-better performance for their ...
    [PDF]The mutual fund graveyard: An analysis of dead funds - Vanguard
    https://personal.vanguard.com/pdf/s362.pdf
    performance, because excluding them can contribute to an upward bias ... evaluated the impact ofsurvivorship bias on both mutual fund and hedge fund returns.

    [PDF]survivor bias and improper measurement: how the mutual fund ...
    www.etf.com/docs/sbiasstudy.pdf
    A New Look at Mutual Fund Performance: Study Methodology… ... “Survivor bias” is a kind of grade inflation for mutual funds that occurs when the funds with the ...


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    #10     May 24, 2018