Top Funds Make $178 Billion in 2019

The video discusses hedge fund strategies, highlighting the success of long-only funds like TCI and Egerton. It compares long-only and long-short strategies, noting that short bets underperform in rising markets. Hedge funds struggle to match benchmarks due to market cap weighting and the dominance of mega-cap stocks. The video emphasizes the challenges of hedging and the risks of high correlation in volatile markets.

Which hedge fund strategy was highlighted as the best performer last year?

• Market-neutral strategy

• Long-only strategy

• Arbitrage strategy

• Short-only strategy

What was the return percentage of the TCI fund last year?

• 41%

• 34%

• 13%

• 21%

Why do hedge funds often struggle to match benchmark returns?

• They are not market cap weighted.

• They avoid technology stocks.

• They focus too much on short selling.

• They invest heavily in small-cap stocks.

What is a potential risk for hedge funds that focus on mega-cap stocks?

• Increased regulatory scrutiny

• Higher correlated performance when the market turns

• Lower liquidity

• Higher fees

What is a key challenge for hedge fund managers who aim to hedge?

• Increasing fund size

• Reducing management fees

• Avoiding benchmark hugging

• Achieving high returns