Hedge Funds Post Worst S&P 500 Lag in 20-Plus Years This July
Goldman Sachs data shows hedge funds had their ugliest underperformance versus the S&P 500 in July in over two decades of records.
If you were betting alongside the big hedge funds in July, you got smoked. Goldman Sachs flagged that hedge funds just logged their worst underperformance relative to the S&P 500 in more than 20 years of tracked data — and that's a brutal stat no matter how you spin it.
Think about what that means for the so-called "smart money." These funds charge fat fees, run sophisticated models, and still couldn't keep pace with a plain vanilla index during one of the market's defining months. The S&P 500 ran hard, and the hedgies were left in the dust by a historic margin.
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For retail traders, this is actually a useful signal. When hedge funds underperform this badly, it often means their positioning was crowded on the wrong side — short exposure, defensive hedges, or sector bets that the market steamrolled right through. July's rally apparently caught a lot of institutional money flat-footed.
The Goldman data covering two-plus decades makes this more than a one-month fluke story. It tells you that even the most resourced players in the game can get caught leaning the wrong way when momentum shifts fast. The lesson: don't assume the big funds are always positioned where the puck is going.
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