BOSTON- Hedge funds have risen at an average annual rate of 8.4 percent since 2000, less than half the gains of the 1990s, according to data compiled by Hedge Fund Research in Chicago. Vanguard Group’s flagship mutual fund tracking the Standard & Poor’s 500-stock index climbed 15.6 percent last year, compared with the 6 percent drop of Goldman Sachs Group’s biggest hedge fund, whose management fees are about 10 times steeper.
The subpar performance is not stopping the world’s largest financial institutions, including UBS in Zurich and J.P. Morgan Chase in New York, from chasing higher fees by offering copycat hedge funds to people with as little as $1,000 to invest. Assets of the so-called long-short funds almost doubled to $16.5 billion in the United States in the past two years, according to Financial Research of Boston, which tracks money flows.
