CHART OF THE DAY: Hedge Fund Performance This Year Is Just Sad

Sam Ro | May 22, 2013, 8:38 AM | 2,780 |

The analysts at Goldman Sachs have just published their latest Hedge Fund Trend Monitor report, which tracks the equity investments of the world's hedge funds.

One thing is clear: hedge funds are struggling to keep up with the market.

"The typical hedge fund generated a YTD return of 5% through May 10, compared with 15% gains for both the S&P 500 and the average large-cap core mutual fund," wrote Goldman Sachs Amanda Schneider.  "Hedge funds returned an average of 3.5% in 1Q 2013, lagging the S&P 500 by 700 bp. Last year the average fund returned 8% vs. 16% for the S&P 500."

We recognize that not all hedge funds are out their to beat these benchmarks.  Furthermore, five months is certainly too short a period of time to judge performance.

Nevertheless, this only supports the argument that most investors are much better off sitting in a boring, low-cost index fund.

Goldman Sachs

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