Why Non-Hedge is Better 为什么不对冲反而更好

This year I have learnt a great lesson from investing in hedge fund in a volatile market. My financial advisor suggested a famous hedge fund from Renaissance for me last year, I was once excited and hoped it could boost my return over my passive index fund. However its return is brutal this year.

今年我在波动特别大的市场里深刻体会了投资对冲基金的风险。去年我的投资顾问给我推荐了一个文艺复兴的对冲基金,我非常的激动,希望能比我的大盘指数基金获得更好的回报。然而今年它的回报异常的差。

Yes, we had a very shocking pandemic early in the year and market went down 40% in March and it was devastating. Then the Fed lowered interest to 0, after several crazy meltdowns as 10% down daily, then market stopped right there and went back up, like 10% up daily. It was very unpredictable and volatility went through the roof. If the investor were to stay the course and not make changes, it would not be bad after all if you look back. If you experienced 2008, it took several years to come back, while due to the powerful financial relief and optimism of pandemic overcome, the market bounced back much quickly this time. My passive index is doing so well, but the the hedge fund from Renaissance didn’t recover as fast as it should. And in July, Aug, the market turns positive while the fund didn’t come back and in Sep, Oct, the market is edging up more, Sadly the fund even lost more. What went wrong?

的确,今年年初来了一场震惊的世界范围流行病,三月份大盘跌了40%。然后美联储把利息讲到了0, 来了几次10%的熔断,市场下跌突然停止,又来了几次接近10%的上扬。这是非常难以推测的,波动性惊人的大。如果投资人不要乱调整,维持原状,现在回顾结果一点都不差。如果经历过2008的金融危机,就知道市场花了几年时间回到原处。但是这次非常有力的金融救助和最终会克服流行病的乐观,市场回弹非常快。我的指数基金走的非常好,但是我文艺复新的对冲基金却没有回来。7,8月份的时候,大盘都已经比年初要高,但是我的对冲基金没有完全恢复,9,10月,市场继续上升,但是对冲基金却还在亏钱。这到底出了什么问题呢?

I called my advisor and she got me into their monthly client meeting tele conf. The fund manager explained how they hedge by calculating beta, and the beta is off and dated in the extremely volatile market, so they under hedged when the market went down and over hedged when the market went up. The rational sounds very reasonable, but I felt they are going to have hard time again in a volatile market: the beta calculation is always dated, the faster the market change, the more difficult they can catch up with the market. I finally made up my mind to pull back the money. The redemption took months, hopefully I will get it in Dec so I can roll the money into my passive indexer and assume all the market risk and never think about hedging again.

我联系了我的顾问,她让我听听他们针对客户的电话会议,基金经理解释计算beta(和市场的关联性参数)是延后不准确的,所以市场下降的时候,没有充分对冲,市场上升的时候,过分对冲。这听起来有些道理,但是我觉得他们以后在市场波动非常大情况下都会有麻烦因为beta都是有延迟的,我总算下定决心把钱赎回来。虽然要花几个月的时间,希望12月份能拿回来,我将把它放到我的大盘基金里,承担所有的市场风险,再也不考虑对冲了。

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