Hedge Fund Performance Thrown Into Question

Does the hedge fund industry have more bark than bite? According to a potentially devastating study by Barclays Capital, industry-wide returns are being “vastly overstated” by “imperfections” in the way indices are compiled. How overstated? Possibly as much as 6 percent, though even 1 percent would radically change the asset classes relative risk-reward profile. Tim Bond, author of the highly regarded Equity Gilt Study, said: “If you take some indices at face value, you are getting a flattering picture of the industry.” Funny how that works.
HF Returns Are Vastly Overstated [The Times (UK)]

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