AF Advisors’ analyst Ján Micenko published an article in Financial Investigator about the hedge fund industry. In the article, Ján discusses the recent underperformance of hedge funds, the causes for the underperformance and the future of the industry.
The hedge fund industry came under heavy criticism for poor performance since the financial crisis. Ján claims that the industry still looks attractive when one considers their risk-return profile over the last 20 years and as an addition to the portfolio, rather than a stand-alone investment.
“The election of Mr. Trump might in the end be just what the hedge fund industry needs; less regulation and more uncertainty.“
Further analysis shows, however, that hedge funds are less attractive when one looks at the last 10 years only. Possible explanation for disappointing performance are the rise of passive investing, quantitative easing, low interest rates, increasing competition and regulation.
Nevertheless, Ján states that the uncertainty surrounding the election of Trump, increasing interest rates and the shift from monetary to fiscal stimulus can revive the industry in the coming years.
Read the full article here.
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