Key Takeaways
- • Index Fund Advisors founder Mark Hebner reviewed the evidence on hedge funds and found that, for the 15 years to June 2023, the HFR Fund-Weighted Composite returned 4.0% a year net of fees.
- • Over the same 15-year period, a simple 52/48 blend of stocks and T-bills returned 4.5% a year, outperforming the hedge fund composite by roughly 0.5 percentage points annually.
- • Research cited by Richard Ennis addresses the effective fee burden of hedge funds, though the primary source excerpt is truncated before stating the figure.
- • The primary source excerpt is largely unrelated market commentary from Opalesque, so the hedge fund research findings rest on a single brief publisher summary.
Summary
Index Fund Advisors founder Mark Hebner reviewed the research on hedge fund performance and reported that, for the 15 years ending June 2023, the HFR Fund-Weighted Composite index returned 4.0% a year net of fees. Over the same period, a simple 52/48 blend of stocks and Treasury bills returned 4.5% a year, a gap of roughly half a percentage point annually in favor of the passive blend.
The analysis cites research by Richard Ennis, which addresses the effective fee burden borne by hedge fund investors. The publisher summary is cut off before stating that figure, so the specific effective fee estimate is not reported here.
The article was republished through Opalesque's Alternative Market Briefing, whose body text in the available source consists of unrelated futures trading commentary on the Nasdaq-100 (NQ) contract, dated March 2021. That material does not bear on the hedge fund findings and is not drawn on in this summary. A separate Index Fund Advisors listing carries the same headline, but it provides no additional detail beyond the title.
For institutional allocators, the central finding is that a low-cost, two-asset benchmark matched or exceeded the reported net return of a widely tracked hedge fund index over a 15-year window, a result that bears directly on the case for hedge fund allocations versus passive alternatives.
The analysis cites research by Richard Ennis, which addresses the effective fee burden borne by hedge fund investors. The publisher summary is cut off before stating that figure, so the specific effective fee estimate is not reported here.
The article was republished through Opalesque's Alternative Market Briefing, whose body text in the available source consists of unrelated futures trading commentary on the Nasdaq-100 (NQ) contract, dated March 2021. That material does not bear on the hedge fund findings and is not drawn on in this summary. A separate Index Fund Advisors listing carries the same headline, but it provides no additional detail beyond the title.
For institutional allocators, the central finding is that a low-cost, two-asset benchmark matched or exceeded the reported net return of a widely tracked hedge fund index over a 15-year window, a result that bears directly on the case for hedge fund allocations versus passive alternatives.
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