Jan 13, 2022 - Economy

Charted: Hedge funds still can’t match the S&P 500

Annual returns for <span style="background:#A283FF; padding: 5px; color:white;">hedge funds</span> vs. <span style="background:#35D386; padding:5px;">S&P 500</span>
Data: eVestment; Chart: Will Chase/Axios

2021 wasn’t the year for hedge funds to finally outperform passive investing.

The big picture: Some hedge funds are sure to beat the index in any given year. But average hedge fund returns continued to lag — in a big way, according to data provided by eVestment.

  • Event-driven-activist strategies came closest to the S&P's 28.7% gain last year, returning 27.3%. The runners-up were distressed investing at 14.6% and long/short equity at 13.4%.

The bottom line: Actively managed mutual funds don't usually beat the market either, as we've reported. And that's one reason assets invested in passive funds have ballooned over the last five years.

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