Hedge Funds Great At Picking Absolutely The Worst Stocks This Year


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]