Tech-focused hedge funds lost 10.2% in July. JPMorgan called it the worst month on record for the category. These are the same guys who spent two years explaining why their 2-and-20 fee structure made sense because they had "alpha generation capabilities" and "sophisticated risk management frameworks."
10.2% in one month.
That's not a drawdown. That's not volatility. That's your nephew losing your money faster than you could've lost it yourself buying calls on companies you can't pronounce.
The beautiful part? These funds didn't even get the excuse of a black swan event. No bank collapsed. No country defaulted. Tech stocks just went down because they went up too much. That's it. The entire thesis was "number go up" and when number went down, the risk models apparently just started smoking in the corner like a Dell laptop from 2007.
JPMorgan documented this for posterity. Someone at JPM woke up, pulled the numbers, and said "we should tell people about this." Probably the same division that securitized subprime mortgages. Real guardians of financial stability over there.
Here's what kills me. Retail traders lose 10% in a month and they're idiots gambling their rent money on meme stocks. Hedge funds lose 10.2% in a month and suddenly it's "challenging market conditions" and "factor rotation headwinds." No. You lost the money. You're supposed to be the smart ones. You went to Wharton. You have the Bloomberg terminals. You still ate sh*t harder than a guy who learned about options from a YouTube video titled "GET RICH QUICK WITH WEEKLY 0DTE."
The worst month on record. Not worst since 2008. Not worst since COVID. Worst ever. Someone's getting a performance fee clawback for Christmas.
Photo by Brett Jordan on Unsplash
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