The Top Hedge Funds Based on 10-Year Performance
The S&P 500 has a 10-year annualized return of 14.7%
The S&P 500 SPY 0.00%↑ has declined by about 25% year-to-date, although the average hedge fund has been able to outperform the index handily. Hedge Fund Research’s HFRI 500 Fund Weighted Composite Index, which is comprised of the 500 largest hedge funds, has lost 4.15% this year, while its HFRI 500 Macro Index has increased by 17.45%.
As of October 14th, 198 trading days into the year, there were only 5 years in which the S&P 500 performed worse:
Meanwhile, funds with high AUM have outperformed smaller funds, reversing a pattern that was consistently seen in recent years. The top 25% of funds based on AUM have only lost 1.3% YTD, while the bottom 25% have declined by 6%.
Mega-funds, like Ken Griffin’s Citadel and Ray Dalio’s Bridgewater have generated noteworthy returns. Dalio’s Pure Alpha fund is up 35% this year, although its All Weather fund has declined by 27%. All four of Griffin’s funds within Citadel are up by double-digits this year:
Wellington Fund: 29%
Global Fixed Income Fund: 24%
Tactical Trading Fund: 21%
Citadel Equities: 17%
On the other hand, well-known Tiger Cub funds, such as Tiger Global and Coatue Management, have seen their top holdings collapse in a historically poor year for tech stocks. Chase Coleman’s Tiger Global is down 52%, while Philippe Laffont’s Coatue fell by 19% as of September 30.
Unsurprisingly, retail participants haven’t fared any better. JPMorgan estimates that retail traders are down 44% YTD and down 15% since the start of 2020.
Since the inception of the S&P 500 in 1957, the benchmark index has returned 10.7% annually, so the past decade’s annualized gain of 14.7% has been somewhat of an anomaly for returns. What this means for future returns is up for debate, although acclaimed fund manager Stanley Druckenmiller has stated that there is a “high probability” that the stock market will stay flat for the next 10 years.
“There's a high probability in my mind that the market, at best, is going to be kind of flat for 10 years, sort of like this '66 to '82 time period.”
The Top Hedge Funds Based on 10-Year Performance
For the sake of inclusion, I have included the returns of company investment funds, like Hershey Trust Company, into the rankings:
Without further ado, here are the remaining top 3 hedge funds based on 10-year returns: