Before they discovered hedge funds, pension funds and endowments typically held portfolios with 60 percent in equities and 40 percent in bonds. Many would be better off if they had stuck with the old formula.
Hedge funds have trailed both the Standard & Poor’s 500 Index and a Vanguard index fund with the same 60/40 mix over the past five years, according to data compiled by Bloomberg. The balanced fund beat the main Bloomberg hedge-fund index in six of the last seven calendar years, according to data compiled by Bloomberg.
Still as Bloomberg News reports: “GLG Partners, a unit of the world’s largest publicly traded hedge fund manager, formed a long-short equities team in Asia co-headed by a former fund manager at Singapore’s sovereign wealth fund, seeking opportunities in the region’s stock market.” http://www.bloomberg.com/news/2012-07-15/glg-forms-asia-equities-team-co-headed-by-former-gic-manager.html