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Hedge Funds Great At Picking Absolutely The Worst Stocks This Year

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So how can hedge funds have more than half their money in stocks and still return, at best, about one-tenth the S&P500? It’s simple, really:

They continued to favor companies that rely on discretionary consumer spending with a net 21 percent weighting, almost 8 percentage points more than their allotment in the Russell 3000 Index. The group is up 5 percent in 2014, the second-worst performing industry among nine in the index.

Energy companies, the worst performing group so far this year with a 1.7 percent drop, are the second biggest hedge-fund weighting at 14 percent, more than 5 percentage points above their Russell 3000 weighting.

Goldman Analysis Shows Hedge Funds Long and Not So Strong [Bloomberg]



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