, Columnist
Nope, Hedge Funds Are Still in the Dumper
The steady money continues to dominate the smart money.
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Hedge funds are having just as bad a year as ever, but that doesn't seem to stop people from plowing money into the overpriced and underperforming investment vehicles or some hedge fund cheerleaders from saying, erroneously, that the industry's performance has improved.
Last year, investors pulled $70 billion out of hedge funds, according to industry tracker HFR. That seemed to indicate that those who invested in the funds, after nine years of what can charitably be called lackluster performance, had finally realized their mistake. Not quite. This year, $1.2 billion has flowed back into hedge funds. The Wall Street Journal on Monday attributed the reversal in part to a rebound in performance. That's wishful thinking.