But too many hedge funds bought more of the entering stocks than the index-fund managers needed.
Amid the depths of the 2008 financial crisis, NIR, like many hedge funds, suspended investor redemptions.
FORBES: Former NIR Group Analyst Accused of Securities Fraud
Without it, a few too many hedge funds become Ponzi schemes or outright fraud.
In fact, many hedge funds charge 2% of assets, as well as 20% of profits.
Many hedge funds were battered by the recession, but they still hold a powerful allure.
How many hedge funds illegally foreclosed on homeowners and fraudulently conveyed false documentation to mortgage security trusts?
FORBES: Insider Trading: Can An Average Investor Find Comfort In The Latest Probe?
In my view, the lack of hedge used by many hedge funds is the least of their problems.
Many hedge funds also have strategies that make them long illiquid assets, because such assets offer higher returns.
Many hedge funds have strategies that are momentum-based, which leads them to chase asset classes that are rising.
Many hedge funds believe India is in danger of falling out of BRIC.
In fact, many hedge funds do not hedge at all, but rather speculate.
Many hedge funds lost serious money even with a 50% net long construct.
The fact that many hedge funds are down year to date further takes the luster off this once vaunted asset class.
The collapse of the commodities market in 2008 battered many hedge funds.
ECONOMIST: The charge-sheet against commodity speculators is flimsy
If it were less painful, many hedge funds say, they would register.
Mr. Kaplan wouldn't say how many hedge funds flagged by the "aberrational performance initiative" wind up as the target of an SEC probe.
How many hedge funds refuse to reserve sufficiently for potential litigation and repurchase risk for breaches of warranties and representations in their loan portfolios?
FORBES: Insider Trading: Can An Average Investor Find Comfort In The Latest Probe?
The fall of Bear Stearns earlier this year persuaded many hedge funds to switch to Goldman Sachs and Morgan Stanley as their prime brokers.
ECONOMIST: Where will hedge funds put their business in future?
Many hedge funds experience substantial portfolio turnover involving significant commission expenses.
Which is that there are now so many hedge funds chasing any above average profit opportunities that any that they do find will be ephemeral.
FORBES: Why You Shouldn't Invest In Hedge Funds: Adam Smith Says So
How many hedge funds were bailed out in September of 2008?
FORBES: Insider Trading: Can An Average Investor Find Comfort In The Latest Probe?
Many hedge funds take 2% of assets in administrative fees and 20% of annual profits, a model Mr. Buffett has criticized as offering pay for nonperformance.
The unhappy truth is many hedge funds (just like mutual funds) can't deliver on their promise of beating the broader stock market over the long haul.
The worry is exacerbated by the high leverage (ie, use of borrowed money) of many hedge funds: this boosts returns on good days but magnifies losses too.
Third, any foreign money coming into Chile must stay in the country for at least one year, a requirement that has discouraged many hedge funds and pension funds from investing in Chile at all.
ECONOMIST: Can capital controls stop poor countries crashing?
One reason is that many hedge funds have drawn much of their profit from arbitrage spotting apparently unjustified differences in prices of assets with similar risks and betting that the prices will revert to their normal relationship.
How many hedge funds received TARP billions?
FORBES: Insider Trading: Can An Average Investor Find Comfort In The Latest Probe?
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