's John Rekenthaler compared the pros and cons of hedge funds of funds vs target-date funds. The hedge fund investors, who bought a high-cost, complex and opaque investment, fared better during the downturn than target-date fund investors, whose vehicle was low-cost, simple and transparent. But in the long-term, low cost investments have won out, Rekenthaler said.
Target date funds cash flows were consistently positive and have outgained hedge funds of funds since the middle of the aughts.:
It doesn't make much sense to me that becoming wealthier and more informed leads to worse investment results ... but with hedge funds, that does indeed seem to be the case.
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