Due to a greater ease of getting in and out of markets, smaller hedge funds are handily outperforming large counterparts, according to Eurekahedge.
Hedge funds with $100 million of assets under management or less are up 9.7% year-to-date through the end of May, compared with average returns of 5.2% for hedge funds with $500 million or more under management. Those with between $100 million and $500 million are up 9.4%.
Bill Maldonado, head of Halbis, a division of HSBC Global Asset Management, told The Wall Street Journal that markets have been moving very swiftly this year, making it difficult for large funds to switch course. There was an inference that they would be able to turn exposure around very quickly and go short, but, in fact, that didnt happen, he said.
According to PerTrac Financial Solutions, smaller hedge funds have been beating larger hedge funds since 1996. The firms database of performance between 1996 and 2008 shows funds with less than $100 million delivering 13% a year, compared with 10% for funds with $500 million or more.
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