It's been a rough media week for hedge fundsters. On Monday $300B pension plan giant CalPERS
told the world that it's leaving hedge funds behind, a move whose potential implications have subsequently been widely written about, even here on MFWire
. And now the Wall Street Journal
is comparing the hedge fund industry as a whole to low-cost mutual fund titan Vanguard
Yesterday the WSJ's
Kirsten Grind reported
on Malvern, Pennsylvania-based Vanguard hitting the $3-trillion assets under management milestone. Citing eVestment data, the WSJ
puts that $3-trillion figure in perspective by noting that Vanguard's AUM now equals all hedge funds' AUM combined as of May.
Yet by a different metric, revenue, the hedgers are probably still much bigger. If hedge fund firms just earn the 200-basis-point piece of the old "two and twenty" pricing (i.e. two percent of AUM and 20 percent of gains), that would put the hedge fund industry's total annual revenue at around $60 billion. Yet Vanguard, with its low-cost approach and plethora of indexed products, probably averages much less than 100 bps on its $3 trillion.
So, by client assets Bill McNabb
and his team now rivals hedgers. By fees, probably not so much, at least not yet.
Neil Anderson, Managing Editor
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