Superficially, there are two amusing observations to make about a New Normal in which the S&P, courtesy of its Chief Risk Officers Yellen, Draghi and Kuroda, continues to vastly outperform virtually all hedge funds for a 6th year running: the first is that one of the very few funds in our universe which is doing better than the broader market is named Tulip Trend Fund, which in itself speaks volumes, while the other fund that is creating outsized “alpha” is Bill Ackman’s Pershing Square, which has made the bulk of its gains on the back of the Allergan deal where he frontran the investing public, knowing full well Valeant would make a hostile bid, a transaction which the SEC better strike as illegal or else the farce of a market will get even more farcical.
Aside from that, perhaps what is most surprising, or not for those who have been reading our warnings since 2009 that under central-planning alpha creation is practically impossible, is that while YTD some of the most marquee hedge fund names, especially in the global macro arena are generating subzero returns, it is how few funds stand out. Considering we live in a world in which there is no longer any “risk”, and in which even the smallest dip is furiously BTF, this should be a truly disturbing finding, and it means that short squeezes of the most hated stocks will continue to be the single best way to generate “alpha” for the coming months and years.
Best and Worst performing hedge funds in 2014:
Select HF names sorted by August performance:
The same names sorted by YTD performance:
via Zero Hedge http://ift.tt/1pplAXN Tyler Durden