When I began this column in the spring of 2013, one of my early submissions chided hedge funds. Called "Hedge Fund Follies," the article showed that over the previous seven years--a full market cycle, in that it covered the runup to the financial crisis, the collapse, and the subsequent recovery--every category of target-date mutual fund had outgained hedge funds of funds, or HFOFs.
The underlying hedge funds that are owned by HFOFs fared little better. Over that same seven-year period, most hedge fund categories trailed their mutual fund equivalents. For once, man had bitten the dog; the bottom 99% of investors had bested the top 1%.