Hedge Funds Are Inferior Pick

Hedge Funds Are Inferior Pick, Bernstein Says: Chart of the Day

 

 

By David Wilson

     Dec. 13 (Bloomberg) -- Hedge funds are increasingly worth

avoiding as 2012 draws closer, according to Richard Bernstein,

chief executive officer of a money-management firm that bears

his name.

     The funds are “an inferior, more expensive product” than

investing in stocks, bonds and other types of assets through so-

called allocation strategies, Bernstein wrote in a Dec. 9 report

on his outlook.

     As the CHART OF THE DAY illustrates, a Bloomberg index of

Treasury notes and bonds has beaten two composite indexes from

Hedge Fund Research Inc. since 2008. One of the HFRI indexes

tracks individual funds and the other consists of funds of

funds, which own stakes in multiple hedge funds.

     Bernstein, named to Institutional Investor magazine’s All-

America Research Team Hall of Fame this year, included a similar

chart in his report. The New York-based CEO of Richard Bernstein

Advisors LLC wrote that shunning alternative assets, especially

hedge funds, was among his five favorite investment themes for

next year.

     Investing in Treasuries was another of his themes. He also

recommended the U.S. over emerging markets for stock investors,

shares of smaller U.S. companies rather than larger ones, and

relatively small stakes in gold and other commodities. The

outlook is posted on his website.

     Bernstein runs an asset-allocation mutual fund for Eaton

Vance Corp. that opened at the start of this quarter. Class A

shares of the Eaton Vance Richard Bernstein All Asset Strategy

Fund advanced 3.7 percent through last week. The fund’s primary

benchmark, the Barclays Capital U.S. Aggregate Bond Index, rose

0.4 percent in the same period.

 

 

Boudin Chaud. Cous Cous Froide. Allons Tigres--Poussez Poussez Poussez

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

445 North Blvd, 7^th Floor

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One City Plaza, 7th Floor

Corner of North Blvd & 4th Street

Exit 1B I-110 Convention Street, Turn Left to get to North Blvd