Whenever the topic of index funds come up, people should remember:

1. The benchmark for hedge funds is not the sp500, it’s the bond market

2. Because the sp500 is inherently a bet, that America’s top few companies will perform well. This is not a purely risk free, hands off bet.

If you bought the Japanese Index fund, the Nikkei, even today it hasn’t returned to its 1980 peak

You might say “I’ll just get a global index”- in which case congrats, you’ve underperformed hedge funds!

3. There are more factors than just investment returns- ie volatility (Sharpe), drawdowns, etc

So despite what HN seems to think, the hedge fund industry is not in fact, full of idiots.