What do people think about the hedge fund industry?
A lot of people I talk to say that a lot of them are charging alpha fees for really just delivering beta.
For those of you who don't know - alpha means what a hedge fund does above just market performance adjusted for risk, beta is correlated to market performance. Essentially a lot of hedge fund returns are highly correlated to the market.
Are hedge funds just delivering beta? Watch
- Thread Starter
Last edited by DownloadKing; 10-10-2016 at 00:31.
- 10-10-2016 00:29
- 10-10-2016 00:35
The rate of return might be similar to the market performance but the risk-adjusted return is higher. People pay hedge fund managers the fees because they believe that they will manage the money better to avoid large losses when there is a market downturn so their money will be safer in his or her hands than in an ETF