, Columnist
A Decent Year for Hedge Funds Is Still Not Good Enough
Double-digit returns in 2021 still lagged the benchmark U.S. stock index.
Photographer: Photo by Ole Spata/picture alliance via Getty Images
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There’s good news and bad news in last year’s hedge fund numbers. While the industry has recovered some of its swagger, its performance continues to suggest that active portfolio managers aren’t living up to their promise to outpace passive returns, even during bouts of market volatility.
The industry can point to its highest average returns since at least 2014 and the fresh cash being allocated to firms by investors. Skeptics will note that customers would have made more money buying a low-cost equity index tracker tied to the benchmark U.S. stock index. I count myself in the latter camp.