Hedge fund indices have underperformed the regular indices year-to-date through June 30th. The S&P 500 is up 6%; the MSCI World Index is up 5.62%; and the Barclays Capital Aggregate Bond Index is up 2.72%. Meanwhile, for the same period of time, the Dow Jones Credit Suisse Hedge Fund Index is up 1.65% and the HFRI Fund of Funds Composite Index is down 0.33%. Despite this, investors added $29.5 billion into hedge funds in the second quarter. Of all the investment strategies, Global Macro has had the most difficult year as there have been no market trends in the current economic environment as it lurches from crisis to crisis. However, this message is not coming across to the investors as 64% of them will seek to invest in these underperforming funds, according to a survey of 2,700 institutional investors and hedge fund managers by Prequin Research.
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