Hedge funds are terrible at investing, again
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Your 2-minute guide to demystifying money and making you richer
The markets, year-to-date
S&P 500: 5,942.47 ⬆️ 0.28%
FTSE 100: 8,223.98 ⬆️ 0.62%
Bitcoin: $98,054.68 ⬆️ 4.89%
GBP to USD: $1.2422 ⬇️ 0.72%
GBP to EUR: €1.2044 ⬇️ 0.34%
(As of Friday market close.)
Hedge funds, once again, prove they are terrible at investing
Hedge funds are investment houses whose task is to generate above-average returns for high-net-worth individuals and institutional investors — the kind of people who can afford to take risks with their money.
Hedge funds employ the most sophisticated professional money managers on the planet.
These kings of Wall Street do not come cheap. They charge their customers “2 and 20” — a 2% annual management fee charged on all assets invested, win or lose; and a 20% cut of your profits.
So if you had £1 million invested, the fund would charge £20,000 for managing it.
And if your investment rose by 20%, or £200,000, then the fund would take £40,000 of you…