Kinabalu

One Basic Portfolio, 5 ETFs

Sorry if I wasn't clear. My observation is that hedge fund returns have been greatly exagerated by improper calculations. Investors may be attracted to products like Alphaclone because they read about great hedge fund returns. However there are no properly calculated returns for the hedge fund universe and very few individual hedge funds use proper calculation methods for the returns they promote.

I would endorse your comments about ETFs but when they are extended to hedge funds I have to object. The fact of the matter is that hedge fund marketers are far more adept at their jobs than hedge fund managers.


On Oct 02 12:06 PM Scott's Investments wrote:

> Kinabalu - I think you may be confusing holding individual stocks
> vs. tracking some type of hedge fund index. Alphaclone uses the reported
> stock holdings of hedge funds to compose stock portfolios. Thus,
> you are not tracking an index but holding actual stocks using quarterly
> filings of various hedge funds. There are limitations with this system
> but the historical performances w/ lower volatility speak for themselves.
> Of course, with anything, past performance won't guarantee future
> success. I would, however, suggest checking out their site if you
> are interested in understanding the product and strategy more thoroughly.

One Basic Portfolio, 5 ETFs

"he has a new project which allows users to replicate the best performing hedge funds, AlphaClone. The returns speak for themselves."

When it comes to hedge funds the last thing you want to do is accept return figures. Most mutual funds have adopted the GIPS (Global Investment Performance Standards) standards for investment performance calculations. Hedge funds, with their limited required disclosures, still calculate performance in their own subjective, and often misleading, ways. There are no true performance calculations for the hedge fund universe and calculations for individual funds are questionable, as evidenced by the many after the fact lawsuits by investors against principals.

Just 5 ETFs and You're Set? Buy-n-Hold Silliness Still Carries On

I find it interesting to compare this article with "A Discussion with John Bogle" published by Seeking Alpha on the same date. While Bogles comments are laden with research and facts this article has only opinion. If you really want to win the trading vs. buy & hold debate you have to explain why Mr. Bogles statistics are wrong. His comment: "while the SPDR had a five-year return of -1.9% a year—it’s been a difficult market—the average investor in SPDRs had a return of -8.2% a year" would be a good starting point.