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Illustration: Rebecca Zisser/Axios
Hedge funds are losing clients and money as they continue to deliver returns far worse than the broader stock market.
The big picture: Since the beginning of 2015, Americans' total financial assets have grown by nearly $11 trillion, Federal Reserve data shows, and less than 1% of that gain has been in hedge funds.
"The industry has been struggling," Peter Laurelli, eVestment's global head of research tells Axios. "Since the end of 2015, quarterly flow has been negative in 10 of 14 quarters, including in each of the last four through Q1 2019."
What's happening: Last year the industry saw the fewest hedge funds launched since 2000, with the number of funds shutting down exceeding the number of launches in both Q3 and Q4, according to estimates from industry firm Hedge Fund Research. That happened even as closures declined.
Driving the news: There's a clear reason. The S&P 500 has outperformed the average hedge fund by more than 100% since 2009, according to an Axios analysis of eVestment's data.
Hedge fund managers also are eating away at their clients' money with expensive fees.
The bottom line: Plunging share prices and volatility late last year were heralded as a moment for hedge funds to shine, but instead the industry saw the highest outflows since the fourth quarter of 2016.
The boards of companies listed on the S&P 500 and Russell 3000 are staying about the same, despite repeated calls from shareholders for shake-ups, according to a new report from The Conference Board.
The big picture: Last year, 50% of companies in the Russell and 43% of companies in the S&P saw zero change to their corporate boards, a review of SEC filings showed. And in cases where boards did add a replacement or addition, it rarely affected more than one board seat. Just 25% of boards elected a first-time director who had never served on a public company board before, the report found.
Between the lines: Average director tenure is 10 years or longer, the Conference Board found, noting that board seats rarely become available and, when a spot does open it is rarely filled by a newcomer without prior board experience.
Reality check: Calls for change are also coming from inside of the companies themselves. PwC's 2018 corporate directors survey found that almost half of board members thought at least on person on the board should be replaced.
What they're saying: Interestingly, the issue seems more entrenched at smaller firms.
A McDonald's in the passengers' lounge of Humberto Delgado International Airport in Lisbon, Portugal. Photo: Horacio Villalobos-Corbis/Corbis via Getty Images
But the company announced another major push on Wednesday: hiring the elderly to fill its summer jobs.
What's happening: USA Today's Charisse Jones writes: "If you're looking for a gig in your golden years, you might want to check under the Golden Arches."
Why now? The share of teens aged 16–19 who work summer jobs has fallen significantly since the turn of the century. Despite some recovery since the end of the Great Recession, a just 35% had a summer job in 2017, compared to more than half of teens who had one in 2000 and 58% in 1978, according to Pew Research.
What they're saying: Teenagers are nice, but "they're in school, or aren't always excited about working that 5 AM shift," Melissa Kersey, chief people officer for McDonald’s USA tells USA Today. "So we believe matching this mature workforce with the breakfast and lunch shift ... is really important."
Tesla's stock has had an awful 2019, sinking more than 20% while the S&P has risen by nearly that much.
Driving the news: Tesla's first quarter results likely did little to interrupt that trend. The company announced a larger-than-expected $702 million loss, with revenue coming up short as well.
Quick take: The whole year already has been like Christmas for short sellers, many of whom have suffered considerable losses betting against CEO Elon Musk and Tesla over the years. For some of them, it's personal.
What's happening: As 2019 has gone on, others have jumped on the bandwagon, bringing short interest in the company to more than $9 billion, according to data from S3 Partners. It's now the second most shorted company in their fund universe, behind Apple.
Watch this space: "There are no short squeezes on the horizon," says S3's Managing Director of Predictive Analytics Ihor Dusaniwsky, "and even more short sellers may enter the trades if they start sensing blood in the water."