More on hedge funds vs. mutual funds

We've noted that the hedge fund industry and the mutual fund industry have been enamored with one another for the past few years. We're certainly seeing more hedge funds offer mutual funds with hedge fund properties. Fortune notes some of the most recent activity. AQR Capital Management, for example, has launched its first mutual fund. And we're seeing more mutual fund firms launch products designed to deliver hedge fund-like gains.

This is somewhat surprising in light of the horrible publicity that the hedge fund industry has endured. But all in all, you can't argue with the numbers. Hedge funds have vastly outperformed mutual funds (that is, they lost much less in 2008). So for many, the roughly 1.7 percent or so expense ratio looks great compared to a 2 and 20 structure. Still, even with the new entrants, the field is tiny. Alternative investment strategies account for only $59 million of the $6 trillion mutual fund market, Fortune notes. 

For more:
- here's the article 

Related Articles:
Hedge funds eye mutual funds and vice versa
Navigating the hedge fund maze--June 2009
Is the worst over for hedge funds?
Cerberus faces its future
Do hedge funds add value? On-going debate

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