CNBC – The more stocks rise, the further behind hedge funds fall\u2014with the industry now lagging market returns by double-digit percentage points.<\/p>\n
Though hedges actually have attracted more investor cash this year, the bulk has gone to bond funds and away from equities, even though the Standard & Poor’s 500 [.SPX 1444.49 — UNCH ] is up a robust 14 percent so far in 2012.<\/p>\n
As a result, hedge funds have returned just 3 percent year to date, though assets under management have swelled to $2.56 trillion, according to eVestment, a data firm that tracks the industry.<\/p>\n
The change in fortune for hedge funds, which had trounced stock performance over the past two decades, has market insiders searching for answers.<\/p>\n
“Could the underperformance be cyclical or is there a structural change that has changed the return structure of returns for the hedge fund industry?” Mary Ann Bartels, technical analyst at Bank of America Merrill Lynch, wondered in a report Monday. “We continue to conclude as in prior research, there (are) likely too many hedge funds chasing (too) few returns.”<\/p>\n