Hedge Funds Are Pocketing Much of Their Clients' Gains with 'No Limit' Fees

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1. Crazy graph format lol

2. I thought management fees were supposed to pay for comp?

3. Buying SPY wins again?

4. I don't really care about rich people getting ripped off, but I wonder if any of my money leaks into these funds

Old people who don't watch their assets, very rich people who don't watch their assets. Maybe we should build a protection mechanism for it - maybe call it the Consumer Finance Protection Bureau?

I agree that's a problem to be discerning about - and it may be impossible to be discerning about - I also think people are looking for any reason to just "index" and purchase the S&P 500 or VOO ETFs

like A) from being ineligible to be in hedge funds, and then B) to justify their fear

but hedge fund returns are not able to really be aggregated so simply, there have been attempts, I can pull up whatever article you're probably thinking about, but in real life if you join a hedge fund, you aren't joining a portfolio, your capital is applied to new positions.

so every subscription to a hedge fund has unique performance. only people that joined at the exact same time with the same amount of capital have a chance of having the same experience.

I think that reality muddies most of the discussion about the concept of hedge funds and investor returns.

You should definitely look for the strategy you like, followed by liking the people running the fund.

Automated protection tools could also help in monitoring hedge funds, similar to how apps like BillGuard[1] worked for personal finance. Many investors don’t actively track their holdings the way they do with credit cards.

[1] https://en.wikipedia.org/wiki/BillGuard