Goldman Sachs maintains a database of hedge fund incompetence stretching back more than two decades. They chart it. They update it monthly. They probably have a guy whose entire job is watching smart money eat shit and recording the exact consistency.
July 2024 broke the record. Hedge funds underperformed the S&P 500 worse than any month since Goldman started keeping score. That includes the dot-com crash, the financial crisis, and every other period when billion-dollar portfolio managers allegedly justify their fees by zigging when markets zag.
They didn't zig. They ate a shovel.
The S&P 500 went up. Hedge funds went up less. This is the thing you pay two-and-twenty for. Sophisticated risk management. Uncorrelated alpha. Access to strategies retail can't touch. What you got instead was a leveraged index fund with worse returns and a guy named Thad who won't return your calls.
Twenty years of data. July was the worst. Not second-worst. Not tied for third. The worst. Goldman has watched hedge funds fumble through Black Monday echoes, flash crashes, sovereign debt spirals, and pandemic whipsaws. None of those months were as bad as this one.
Retail traders bought SPY calls and went to Applebee's. Hedge funds deployed multi-factor quantitative frameworks and got their faces ripped off. The democratization of finance continues to mean that idiots with Robinhood accounts can now watch professionals lose worse than they do.
Goldman will add July to the chart. The bar will be the longest. Someone will present it at a conference. People will nod and say market conditions were challenging. Then they'll go back to charging fees that would make a mob loan shark blush.
The data doesn't lie, but it does laugh.
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