(Harvest) Hedge funds don\u2019t get a lot of love these days. They\u2019ve underperformed for years, and their fees \u2014 the standard is 2% of assets and 20% of profits \u2014 make them pariahs in the age of indexing and low-cost robo advisors.<\/p>\n
Hey, I get it. The high fees and lousy performance of competing hedge funds was a major reason that I started a liquid alternative robo advisor with my partner, Dr. Phillip Guerra. We run a suite of risk parity portfolios that hold their own against comparable hedge funds\u2026 and we do it at a fraction of their fees.<\/p>\n
Yet let\u2019s not throw out the baby with the bathwater. While many \u2014 perhaps most \u2014 hedge funds add no real value and certainly don\u2019t justify their fees, there are plenty of hedge funds that absolutely do add value and deserve every last cent. But how do you separate the wheat from the chaff?<\/p>\n