Large funds outperform small funds, PerTrac finds
Average large funds outperformed average small funds, in the negative performance years of 2008 and 2011 and since 1996 average large fund lost less than the small fund in 61% of these monthly periods, according to findings of analytics provider PerTrac.
The study, based on 15 global hedge databases, found that large funds dipped 2.63% on average in 2011, the least when compared to small funds’ 2.78% and mid-size funds’ 2.95% slides.
Large funds also maintained lower annualized volatility statistics relative to small funds. The study defines a fund as small if its assets under management are less than $100m, mid-size if assets are between $100 and $500m, and “large” if assets managed exceed $500m.
Investors with a higher volatility appetite and seeking to maximize returns should consider funds with less than $100m in AUM, since the average small fund has outperformed the average mid-size fund and average large fund in 13 out of the last 16 years.
“The findings suggest that investors interested in exposure to hedge funds and seeking to protect their wealth should examine funds with over $500 million in AUM, since the average large fund has had lower losses in negative performance years and lower annualized deviation figures compared to the average small fund,” said Jed Alpert, managing director of Global Marketing at PerTrac.