The buy side of the investment world is constantly looking for new methods to generate alpha, the metric that represents the active return on an investment versus the performance of a broader market index or benchmark.
It would be so much easier to make money on investments if one knew for a certainty the end from the beginning. While economic forecasts can be helpful, they should be viewed with caution and even scepticism by shrewd investors, even when the source has been right “most” of the time—most of the time is still short of all the time.
The $3 trillion hedge-fund industry is clearly losing its appeal as it delivers progressively lower returns to investors. According to data released by Preqin, a provider of information on the alternative-asset industry, hedge funds yielded average returns of 12.22 percent in 2013, 4.65 percent in 2014 and only 2.02 percent in 2015.