Hedge funds have outperformed traditional asset classes for the last 17 years, says a KPMG/AIMA study, The Value of the Hedge Fund Industry to Investors, Markets and the Broader Economy.
“Canada has a strong but relatively small hedge fund industry compared to other global hedge fund markets,” says Peter Hayes, partner and national director of alternative investments at KPMG. “But, the Canadian hedge fund market is growing rapidly, partly as a result of increased allocations from institutional investors to Canadian hedge fund managers.”
The study finds hedge funds return approximately 2% higher on average than global stocks, bonds and commodities. Additionally, the funds’ returns come with lower risk and volatility when compared to stocks or commodities.
Hedge funds gained an average return of 4.19% per year from 1994 to 2011. Also, portfolios that included hedge funds outperformed most portfolios with the traditional 60% stocks, 40% bonds allocation.