Hedge funds outperform stocks and bonds
Hedge funds have produced more consistent returns than equities or bonds over both the short and long term, according to joint research by alternative investment manager the Alternative Investment Management Association (AIMA) and data provider Preqin.
The report, that looked at the returns of more than 2,300 funds, found that hedge funds outperformed equities and bonds on a risk-adjusted basis over one, three, five and 10-year periods.
The value of hedge fund performance gains in 2017 stood at around of $250 billion and about 32 per cent of all hedge funds produced double digit returns in 2017, which represented a 23 per cent growth from 2016.
AIMA’s chief executive, Jack Inglis said: “We already knew that 2017 was a good year for hedge funds, with 11 per cent returns for the average fund and gains in every month of the year.
“But this new research makes an important contribution to the debate about hedge fund performance over the long-term since it shows that hedge funds have produced consistent and competitive returns for the last 10 years,” he said.
“This of course helps to explain why the industry has consistently expanded and attracted new investor capital since the global financial crisis.”
Amy Bensted, Preqin’s head of hedge funds, stressed that hedge funds managed to become an important part of institutional portfolios since the global financial crisis (GFC) and proved their value since then within the portfolios of investors such as pension funds, endowments, sovereign wealth funds and institutions.
AUTHOR
Oksana Patron
Recommended for you
Australian equity ETFs attracted record inflows of $3.2 billion in 1Q25, while heightened volatility led to a decline in flows for global equity ETFs, according to Vanguard.
The failure of a clinical trial by biotech firm Opthea has caused shares in its backer Regal Partners to decline 52 per cent year-to-date and hit its funds under management, quarterly flows show.
GQG Partners has revealed its quarterly flows for the first three months of 2025 were up 5.8 per cent, after a difficult final quarter of 2024 as a result of institutional redemptions.
Global asset manager Janus Henderson has signed a strategic partnership with life insurer Guardian Life, which will commit US$400 million to accelerate the firm’s fixed income development plans.
