A diversified traditional portfolio would have achieved better investment results than the average hedge fund of funds from January 1990 to March 2006, according to analysis by Presidio Financial Partners, a wealth management firm.
Presidio compared a model passive portfolio (comprising 40% bonds, 20% U.S. large-cap equities, 15% international equities, 10% U.S. small-cap equities, 10% high-yield bonds and 5% emerging market equities), which would have returned 10.6% for the same period, with the 10.1% return of the HFRI Funds of Funds index. The difference was more marked over a shorter time period — April 2000 to March 2006 — when the model portfolio returned 6.3%, compared with 5.2% for the index.
