It’s time again for another installment of “Hedge Funds Are a Ripoff,” our long-running series chronicling the asset class’s habit of underperforming far less exotic investments while charging more and limiting clients’ access to their own money.

Hedge funds posted their worst first-quarter results since 2008, according to financial data service Preqin, whose “All Hedge Fund Strategies” index shows a gain of 1.2 percent since the start of the year. That compares with a 1.8 percent total return for the Standard & Poor’s 500-stock index through March 31. Hedge funds have badly trailed plain-vanilla equities over the past 12 months, gaining 8.53 percent vs. 19.32 percent for the S&P. In 2013, the gap between hedge funds and stocks was the widest since 2005.

Defenders of hedge funds often get exasperated when the asset class gets compared with stocks: The investments are not supposed to outperform equities when the market is on a tear, this argument goes—they operate complicated strategies that hedge against lots of contingencies, so that they do well in all types of weather. Well, nobody would call 2014 a bull market, and hedge funds aren’t exactly shining now, either.

This chart shows first-quarter returns for the S&P, the HFRX Global Hedge Fund Index, and the Global X Guru Index ETF, an exchange-traded fund that tries to recreate the performance of select hedge fund managers:

Long/short hedge funds, which bet on some stocks to rise and others to fall, may have missed a chance to create some separation during the market’s April slide. As technology stocks led the selloff, short sellers were nowhere to be found, Bloomberg reported April 14. Short interest in Facebook, Netflix, and other companies has plummeted to 1 percent or less, missing out on profiting from price declines approaching 20 percent. “Most people told me they’re scared to death to short,” John Thompson, the chief investment officer at hedge fund Vilas Capital Management, told Bloomberg. “They’re acting on fear instead of logic.” This kind of perfectly mistimed trading is supposed to be the hallmark of ordinary investors, not the hedge fund managers who command extravagant compensation for their supposed expertise.

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