http://www.cnbc.com/id/48740709Quote:
Maybe the smart money isn’t really all that smart after all.For most of this year, the overwhelming majority of hedge funds have underperformed major stock benchmarks, a development that undermines the idea of mega-investors as market-beaters.
According to a report from investment bank Goldman Sachs [GS 104.67 http://media.cnbc.com/i/CNBC/CNBC_Im...hlist_down.gif -0.65 (-0.62%) http://media.cnbc.com/i/CNBC/CNBC_Im...ltime_icon.gif], only 11 percent of hedge funds outpaced the S&P 500 through August 3. The report analyzed 699 hedge funds with $1.2 trillion of gross equity positions.
The average hedge fund http://media.cnbc.com/i/CNBC/Section...ains_icon1.gif returned just 5 percent year-to-date, while the S&P 500 was up nearly 12 percent. Meanwhile, the average large-cap core mutual fund posted a 10 percent gain.
A mere ten percent of hedge funds posted returns greater than 15 percent, while a fifth of hedge funds posted an absolute loss year to date. (Related: Dumb Money: Hedge Funds Can't Even Beat Bond Funds).

