New York (HedgeCo.net) Over the course of the last nine months, the media and many politicians have been bashing hedge funds for one thing or another. Back in the first quarter there were a number of articles that bashed the industry because they didn’t beat the S&P 500 for a second straight year. The second quarter saw a number of Democratic politicians bashing the industry over the carried interest tax loophole that applies to hedge funds.

Here we are in the third quarter and the media is bashing the industry because former hedge fund manager Martin Shkreli raised a drug’s price from $13.50 to $750 per pill. Even though Shkreli isn’t in the industry any longer, almost every article title has the words “hedge fund” in there. Why? Because they want to sensationalize things as much as possible and they feel very comfortable bashing the hedge fund industry.

Never mind the fact that in August when the overall market was down over 6% the hedge fund industry as a whole was only down 1.99% based on the Credit Suisse Hedge Fund Index. Apparently the headline “Hedge Funds Beat Overall Market in August” wouldn’t draw as much attention.

The other thing that has happened in the third quarter is that several of the Republican presidential hopefuls have jumped on board with the idea of reforming the way hedge funds are taxed. In particular Donald Trump and Jeb Bush have both joined the populist movement calling for a change. Apparently both Republicans and Democrats alike are comfortable bashing the hedge fund industry.

You may have noticed that none of the negativity in the last two quarters has anything to do with the performance of hedge funds. Now that hedge funds are starting to outperform, it is almost as if the media had to find something else to bash the industry for. So they focus on someone that used to be in the industry and how he raised the price of a drug. They focus on the politicians and their statements regarding the industry. You don’t hear them talking about the fact that hedge funds have outperformed the overall market in two of the last three months or how during bearish phases in the market the hedge fund industry has historically outperformed the overall market.

Yes we are part of the alternative industry and yes we work hand in hand with hedge funds. However, the HedgeCoVest platform takes the ancillary items the media wants to bash the industry for, such as high fees, tax loopholes, etc., and it removes them from the equation. The platform allows investors and managers alike to focus on the most important goals—growing and protecting your assets.

Rick Pendergraft
Research Analyst
HedgeCoVest