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Santoli: Hedge funds’ pain could be your gain

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters

Hedge funds are on the run. And once their footsteps quiet and the dust settles from their retreat, the markets could present more ripe investment opportunities for those who know where to look.

A skein of unimpressive performances by hedge funds as a group, with frequent episodes of severe stress to many of their strategies, has sent a lot of this fast money bolting from unstable market sectors and led to investor withdrawals.

The BarclayHedge index of several thousand hedge funds lost 2.8 percent in January, its worst month in nearly four years. For 2015, this index was almost precisely flat — not bad given treacherous global markets but not satisfying as a second-straight limp performance year.



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