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chronic2021 | 4 years ago

Citadel hedge fund. 19% annual return. After fees. For 30 years [1].

The most popular index funds (VTI, VGT) only have a 20-year track record, with a paltry 9% and 13% annual return, respectively.

[1] https://www.clearbrookglobal.com/citadel-millennium-d-e-shaw...

discuss

atombender|4 years ago

The Vanguard 500 Index Fund (VFINX) has existed since 1976.

Kenneth French (the "French" in the Fama-French asset pricing model) provides market data going back to 1972 [1] and can be used to reconstruct index fund performance.

Citadel doesn't have individual clients, and if you're not a billionaire I don't see how you'd gain access to their hedge fund.

[1] https://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data...

dasil003|4 years ago

Huh? The first index fund was started 45 years ago, and indexes existed and are tracked far longer than that. Tell me what percentage of hedge funds beat the S&P over the last 50 years?

chronic2021|4 years ago

If you cherry pick the US S&P (over international, and over small cap), I’m allowed to cherry pick hedge funds.

Many funds consistently outperform the S&P by 2-3X over 30-40 years. Minimum investment, $5-10M, of course.

Buy and hold is the best option for those under USD $10 million net worth, but you must acknowledge there are semi-closed funds/prop trading firms that consistently beat the market.

Spooky23|4 years ago

What percentage of hedge fund clientele exclusively invested in a single hedge fund 50 years ago? Many index fund evangelists focus on that assumption. It’s a strawman.

You can invest actively and intelligently. For example, my 401k offered an emerging markets fund (MGEMX) that isn’t the ideal fund from a cost structure perspective... but it performed really well for a few years. It wasn’t speculation or reckless behavior to have exposure to that sector. Portfolio rebalancing booked my gains when it was rising 30%, and I ended up doing well when 2008 killed that sector.

That doesn’t mean buy and hold doesn’t make sense either. If I was lucky and held on to an early fun money Bitcoin buy I’d be on an island right now!