Well it is a bit too early to give a final verdict on which asset class performed best in this very very difficult environment but with less than three months to go, I guess we can already draw some early conclusions.
To summarize our observations, the best performing asset class so far goes to bonds, more specifically U.S. treasury bonds (with European Government bonds a close second). Oh wait a minute, treasury bonds have stolen the spotlight from hedge funds by performing in a manner that is "characteristic" of hedge funds??? And all that at a fraction of the cost (2/20 was it?), without promising (or guaranteeing was it? please forgive my memory lapse) de-correlation from other asset classes (most notably equities) and (at least for some of them) without promising absolute returns (in my understanding defined as positive performances irrespective of the market conditions).
That is quite a feat if you ask me (see the year to date graph above showing bonds as the white line, equities as the green line and hedge funds as the red line sandwiched in-between if you don't believe me).
Well, surprise surprise! Just when we were all expecting hedge funds to perform like "hedge funds" should, they instead followed the equity route. That important role was relegated to government bonds. Are the hedge fund characteristics mentioned earlier just a myth? Well, to be fair, they still have a bit less than three months to prove that assumption wrong. So I will wait a while more before launching my diatribe.
