Hedge Fund Returns

Average Hedge Fund Returns and The Returns of Top Hedge Funds

top hedge fund returns grow faster than the competition
Top hedge fund returns grow much faster than average hedge fund returns

Click here to check Winvest’s hedge fund returns for the years 2016-2020, beating the S&P 500 by approximately 101%.

Of all the different types of institutional investors in the world, top hedge funds rank highest in risk-adjusted returns. The average hedge funds just can’t compete with the top hedge funds.

There’s the retail investors, also known as individual investors. Then there’s the asset managers that manage money through separately managed accounts. There’s also investment managers that manage investments exclusively through funds. The speculators are also market participants along with the others.

All the different market participants invest in the market but it is the top hedge funds that have scored the highest risk-adjusted returns among all the competitor categories. Average hedge funds returns don’t compare historically to the top performing hedge funds.

Top Hedge Funds

The top hedge funds lead the way in highest risk-adjusted returns of all the different types of investment managers in the market. One of the most impressive hedge fund track records emanates from New York, at Renaissance Technologies.

Founded in ’78, the fund relies on mathematical models to derive trading decisions. According to Wikipedia, the fund has returned 39% annually between 1988 and 2018. Those are the post-profit margins. Before paying fees the fund has recorded 66% returns, before fund investors have to pay out fees back to the fund.

For more information on their fund, or how to become an investor with them, please click here.

Although Renaissance is a powerful player in the hedge fund sector, it’s no secret that their flagship Medallion fund is inaccessible to outsiders. It is essentially for employees by employees.

Although Winvest returns are not quite as high as Renaissance’s, Winvest is accessible to accredited investors. Between 2016 and 2020, Winvest slightly more than doubled the S&P. What’s more impressive is that 2020 was a non-investing-year. Factoring in a 0 into the five year average, yet still performing among the all time great funds over the five-year period average.

Here’s a link to Winvest’s 2016 investments, beating the market by more than 420% for that particular year.

Winvest Performance

Winvest’s standard investment portfolio, the Associate’s portfolio is a stock-only portfolio. It focuses on S&P 500 companies that have high potential, and high probability for future growth. Winvest’s flagship portfolio, the Master’s portfolio, uses the same stock selections as the Associate’s portfolio, but with added stock options. Although the Associate’s portfolio has delivered market-beating performance since its inception in 2016, there is still room for improvement, hence the creation of the Master’s portfolio.

The reason for the creation of the Master’s portfolio was to offer to the market unparalleled performance, beyond that which the Associates portfolio can offer. This is achieved by adding long-term stock options to the the portfolio.

Click here to view Winvest’s Associate’s portfolio performance for 2017.

Fund loads

One benefit of making investments through Winvest is its no-load sales approach. Mutual funds are frequently sold with a load fee attached to them.

A front-end load fee is where a mutual fund takes its fee out when an investor buys initial shares. For example, if a person or business invested $10,000 into a mutual fund and the front-end load fee is 5%, then the person or business would only have $9,500 going towards being invested.

Winvest has no load attached to its fund, and is one of the many benefits for its investors.

A back-end sales load is another type of sales load for mutual funds. This type of load takes a fee when an investor wants to sell or redeem their mutual fund shares. It is the opposite of the front-end load fee. For example, if a person or business wanted to invest $1,000 in a mutual fund with a back-end load, then upon the sale of its shares, the load would be taken out. If the fee was 4%, then the amount remaining after the fee would be $960.

The final type of sales load is called a level-load. A level-load (also known as class c shares) are yearly charges taken from the fund’s assets. It is usually a 5% fee.

Average Hedge Funds

It’s true that common hedge funds don’t beat the S&P 500 by meaningful amounts. But the emphasis of this article isn’t about the average everyday funds. The main idea of this article is about the hedge fund returns of top funds, that they beat the market by large amounts after paying fees—the very purpose of hedge funds is investment excellence above the competition.

According to BusinessInsider, most investment professionals cannot beat the market either. In fact, according to BI, approximately 90% of actively-managed, domestic public-equity portfolios underperformed compared to popular benchmarks such as the S&P 500. According to Eric Rosenberg, “If investment professionals can’t consistently beat the market, it’s unlikely that the typical at-home investor would achieve better results.”

According to another BusinessInsider article, the average return for hedge funds in 2020 was just 12.3%, less than the S&P 500’s 18.4% return for the year. It’s true that the average return for hedge funds don’t compare to the top fund leaders of the industry. Nor do they match the consistency of the said performance.

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2 thoughts on “Hedge Fund Returns

  1. I just recently became qualified to invest in hedge funds by achieving “accredited investor status” with my new income level, but I was still turned down by a Midtown-based fund, what gives?

    1. Thanks for the question Justin. Different funds have different admittance policies. Some funds may not even be able to add any additional people or investments to their funds due to legal restrictions on size.

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