This post First appeared on FloatingPath
Everyday we’re seeing more and more media coverage of how hedge funds provide little if any greater returns than a basic market index. The strongest argument anyway, is not that hedge funds are not savvy investors, but that they cannot deliver returns that outweigh their heavy fees.
Generation of alpha may be getting smaller and smaller though still, as @EquityNYC points out that the correlation between hedge funds in the aggregate and the S&P 500 is approaching 1.0. This suggests that whatever hedge there once may have been is no more.