September 17, 2014
Recent trends about investing in hedge funds
Below is a recent article published by Dimensional Funds discussing how some investors are considering using hedge funds for their portfolios. As you may be aware, hedge funds differ from mutual funds in that their use of leverage isn't capped by regulators, and they frequently invest using different strategies, including trading in currencies and short-selling. Hedge funds also frequently have a lack of transparency and typically charge management fees of 2% of assets under management plus 20% of any profits earned!
CalPERS (the California Public Employees' Retirement System), the country's biggest public pension system, recently announced they're getting out of hedge funds following a review of its hedge-fund portfolio after the death of its former chief investment officer. As the sub-headline in a Wall Street Journal article about this change stated, CalPERS is making the move to "simplify its assets" and "reduce costs".
We believe in keeping our investment strategies with our clients simple, easy-to-understand, transparent, and low cost. All of which runs counter to investing in hedge funds. We wanted to make you aware that the country's largest public pension system, whose actions many other pension systems follow, seems to agree with our approach, too!
(See section below for the article.)
Thank you again for having us be your advisor!
Please click on the link below to read the DFA article. Please let us know if you have any questions about this information.
“Jarod and the team take a personal interest in us as clients”
“They are very loyal to their clients”
“On the wealth management side, they counsel me and are intellectually driven, conservative, and disciplined”
“Staff is incredibly competent, fun, warm…fantastic team”