For all of the reports on dismal negative 20% declines in hedge funds this year, PerTrac Financial Solutions found that if the net is cast wider, sound performers can, indeed, be found.
The hedge fund researcher found that the average hedge fund is down -10.83% through October, and that many hedge funds are actually delivering very healthy returns. In the 95th percentile, the average return is 27.08%. In the 90th percentile, it is 13.85%, and in the 80th percentile, it averages 5.11%.
Its a mistake to judge the entire hedge fund industry by a single, average number, said Meredith Jones, managing director of PerTrac Financial Solutions. Once you get away from the average performance numbers, it is clear that a significant number of funds have delivered strong returns this year. In fact, even down to the 70th percentile of hedge funds, performance is essentially flat (-0.27%), meaning that in our sample of 4,500 funds alone, more than 1,300 funds were either flat or positive for the year through October.
By comparison, the average return of mutual funds in the 90th percentile is -23.46% and -27.42% in the 80th percentile.