Many hedge funds delivered disappointing returns last year. The Eurekahedge Hedge Fund Index, which tracks the top hedge funds in the market, rose just 4.4% in 2016 — underperforming the S&P 500’s 11.2% gain.
The performance of individual funds varied greatly, but top investors like Warren Buffett noted that the market was saturated with too many hedge funds, and that their high fees made them poorer investments than basic index funds.