As I told you Wednesday, investors are fleeing hedge funds in droves due to gross underperformance in the face of over-the-top fees.
In fact, the industry as a whole hasn’t seen anything like this since 2009 – maybe ever.
Ironically, the pain hedge funds are facing, based on the pain their trades have inflicted, holds the answer not only to their survival, but to an almost sure miraculous revival.
Understanding what’s gone wrong at hedge funds, how crowding into the same trades, staying too long in trades when cash registers should have been ringing, and how underperformance led to fee wars and investors fleeing for passive index funds, produces the roadmap funds have to follow to make a comeback.
And it shows average Joe investors how they can play the same profitable future.
Let me show you what I mean…
Hedge funds look like they’re down for the count, having been beaten-up by self-inflicted underperformance in the face of over-the-top fees, high profile slip-ups, and investors stepping over them on their way to low-cost, passive investing strategies.
But don’t count Hedgies out just yet…
One reason hedge funds have been underperforming benchmarks has become abundantly clear and can be overcome (as you’ll see). They’re also knocking down fees to hold onto investors and attract new limited partners.
Not only that, the multi-trillion dollar trend towards passive investing could blow up spectacularly.
Today, I’m going tell you what’s going on with hedge fund underperformance, those exorbitant fees, and why the trend tooward indexing could be hell for the market and a godsend for hedge funds.
But first, let’s all get on the same page…