Comments on: “Fund of Funds Are a Cancer”

By: NormanB

NormanB — Thu, 15 Jan 2009 19:40:09 +0000

@Raoul Duke

Ok, some don’t get 10% of profits but the 1% is still a big hurdle on top of the 20% and 2%. So, instead of my guess of 1/1000 being able to beat the averages maybe its 1/500. Who is good enough to find that needle-in-the-haystack? A more reasonable way to get uncorrelated returns is to throw some darts at a list of assets and don’t pay the 20% and 3%. I’ll bet on the darts.

By: Raoul Duke

Raoul Duke — Thu, 15 Jan 2009 14:30:33 +0000

@ NormanB

Fund of Funds are not 10% and 1%, in fact for institutional investors fees are generally a flat 1%. FoF can offer a reasonable way for small institutions to gain access to uncorrelated returns, as long as that remains true they aren’t going anywhere.

By: VennData

VennData — Thu, 15 Jan 2009 09:38:58 +0000

How’s Ron Insana’s FoF? What’s it a feeder to?

By: zitidiamond

zitidiamond — Thu, 15 Jan 2009 06:45:48 +0000

Mort? I hear he’s putting his dough into Arianna Huffington’s web. Can’t tell you what kind of vigorish she’s putting out, though.

By: VoiceFromTheWilderness

VoiceFromTheWilderness — Thu, 15 Jan 2009 02:07:20 +0000

The quote also makes a mockery of the stated reasons for excluding the lower classes from participation in hedge funds. As does the entire hedge fund fiasco generally, but most particularly the bailouts. If investing in hedge funds is ‘too risky’ for those with low networth, then bailing out hedge funds must be too risky for them too. Oh, wait, my bad, I keep thinking there is something called logic, and fairness, and sociatal benefit. I forgot we live in a fact free world in which the only interest is the interest of the wealthy.

By: NormanB

NormanB — Thu, 15 Jan 2009 00:49:09 +0000

Hedge funds take 20% of profits and 2% of assets; Fund of Funds are 10% and 1%. It adds up to 30% and 3%. I don’t know what percentage of managers can overcome those expenses but if its better than 1/1000 I ‘d be surprised. So anybody (Mort Zuckerman are you listening?) who will pay that vigorish doesn’t deserve to have the money in the first place.

By: zitidiamond

zitidiamond — Thu, 15 Jan 2009 00:10:48 +0000

I believe it was Neal Cabuto who said that fund of funds makes fund of fawns of us all; for the jaws of the mountain cat feeding on our tripe will not be long in coming.

By: leftback

leftback — Wed, 14 Jan 2009 21:00:56 +0000

It’s all about the fees, baby….!!

FoF = Fees on top Of Fees.

By: Moss

Moss — Wed, 14 Jan 2009 20:36:40 +0000

Just another example of the sham Wall Street has become. These people are only interested in lining their own pockets. Now all the blood sucking lawyers will get their share. If FOF’s are a cancer than Hedge Funds are an epidemic.

By: DL

DL — Wed, 14 Jan 2009 20:23:07 +0000

Many of the “fat cats” who gave their money to FOF’s would have been better off just buying SPY (or a mix of SPY and TLT).

At least those are liquid.