Adage Capital Trailing Stocks Says ‘Smart Beta’ Distorts Market
- Hedge fund returned 1.1% in fiscal year ending June 30
- Environment is ’most challenging’ seen in years, letter says
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For the first time since it started 15 years ago, Adage Capital Management is trailing the stock market. One reason for the rare underperformance, according to the almost $28 billion hedge fund: The rise of factor-based investing.
Adage Capital, founded by two former money managers at Harvard University’s endowment, gained 1.1 percent in the 12 months ending June 30, according to its quarterly letter, the first underperformance for a fiscal year. The S&P 500 Index returned 4 percent in that period.