in the June 7 edition of
(available online today) takes aim at mutual funds that try to earn positive returns regardless of stock market performance.
The article, titled The Problem with Absolute Return Funds
, goes after mutual funds that use a hedging strategy, such as absolute return, market neutral and equity long-short funds, which Forbes calls "the fad of the moment."
In particular, Forbes attacks the $95 million AUM Old Mutual Analytic
for its high fees and negative returns, and the Vanguard Market Neutral Fund
In April, there were 106 hedge-fund mimicking funds, with $37 billion under management. Over the past five years they have returned 2.6 percent annually on average, according to Lipper, compared to a 2.8 percent annual return for the S&P 500 and 5.4 percent for the Barclays U.S. Aggregate Bond Index, Forbes noted.
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