In 2020, the dichotomy between markets (record-setting!) and reality (nightmare-inducing!) had never been more stark.
That’s why we look not only at the data but at the context.
The S&P 500 finished 2020 with significantly positive performance. Hedge funds were up considerably as well, and they did so with:
1-year volatility of 11.1% (hedge funds) vs. 26.0% (S&P)
a max drawdown of -8.7% (hedge funds) vs. -19.6% (S&P)
a Sharpe ratio of 1.04 (hedge funds) vs. 0.71 (S&P)