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Hedge Funds Continue to Be for Suckers

Once again, hedge funds are struggling to justify the enormous fees they charge.

Hedge funds overall were up around 6 percent as of the end of September, according to a recent report by Goldman Sachs, which tracks the performance of 783 different funds. Under normal circumstances, that might not be so bad, but it comes during a year when stock market indices have mostly shot upwards, with the S&P 500 index having gained over 25 percent. As is always the case when the market is strong, hedge funds—which charge institutions and high-net-worth investors fees of around 2 percent of assets and 20 percent or more of profits—look terrible by comparison.