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Dear Hedge Funds: Index Funds Didn’t Cause Your Lousy Performance
It's never their fault. Because they are the alleged self-proclaimed "smart money" in finance. HAH!
[wipes tears away from eye after fit of laughter]
One beef w/the article, though. Yes, a 2/20 profit structure is atrocious. But I presume saying "indexing" is a dig at Vanguard, right? So 2/20 is one extreme, and a 0.04 ER on an index fund is the other. However I suspect the underlying definition of "indexing" in the article is "low cost only" ... meaning you could probably beat a hedge fund with an actively managed no-load mutual fund with an ER of 1% or less and no 12(b)-1 fees.
For all the people who get off on punching the Hedgies, I recommend catching the new original series show called Billions on Showtime (or on your favorite streaming sites for those who know how to watch all of these shows without a Showtime subscription).
With obvious similarities to Steve Cohen as the hedgie people love to hate and to Preet Barrara as the politically savvy and ambitious prosecutor, with as much (or little) relevance to reality as these popular hedgie bashing articles are, it is a very entertaining and tightly-produced show (with two episodes so far) even if you hate the smug mug of Sorkin, the writer and co-producer of the show, on CNBC. The show does try to make these characters less than black and white but I suspect it caters more to people's pre-conceptions on either side of the two main characters.
Comments
It's never their fault. Because they are the alleged self-proclaimed "smart money" in finance. HAH!
[wipes tears away from eye after fit of laughter]
One beef w/the article, though. Yes, a 2/20 profit structure is atrocious. But I presume saying "indexing" is a dig at Vanguard, right? So 2/20 is one extreme, and a 0.04 ER on an index fund is the other. However I suspect the underlying definition of "indexing" in the article is "low cost only" ... meaning you could probably beat a hedge fund with an actively managed no-load mutual fund with an ER of 1% or less and no 12(b)-1 fees.
With obvious similarities to Steve Cohen as the hedgie people love to hate and to Preet Barrara as the politically savvy and ambitious prosecutor, with as much (or little) relevance to reality as these popular hedgie bashing articles are, it is a very entertaining and tightly-produced show (with two episodes so far) even if you hate the smug mug of Sorkin, the writer and co-producer of the show, on CNBC. The show does try to make these characters less than black and white but I suspect it caters more to people's pre-conceptions on either side of the two main characters.