Hedge funds had their best month in over a decade in November, but continue to perform worse than the broader market, once again raising questions about the value of expensive active investment management.
As Eurekahedge noted in a release, “The better-than-expected efficacy of the COVID-19 vaccines and optimism on the new US administration boosted the performance of the global equity market during the month.”For the year to date, hedge funds are also lagging the broader market. They are up 8.17% in 2020 through the end of November, compared to a 14% return in that period for the S&P 500. A bet on technology stocks did even better: the Nasdaq Composite COMP, -0.07% returned 37.
Related: Hedge funds delivered their worst performance against stock benchmarks since 2011 by one measureMany market analysts have drawn comparisons between 2009’s market backdrop and that of late 2020. Both are recovery periods after massive shocks to the economy, which can usher in change to the financial markets.