Graphic: Hedge funds still get it done

Allocations stable: Hedge fund allocations across the P&I 1000 have remained stable, while alternatives allocations have increased. However, these allocations do not account for hedge fund investments included in broader equity and bond portfolios.

Fees down: Hedge fund managers yielded to demands for lower fees with average management and incentive fees dropping by about 10% each since 2010. Returns were about 4% over the same period.

Downside protection: Hedge funds have protected investors from market downturns since 2010, with an average three-year return of 2.9% when the S&P 500 is negative. Volatility increases in times of market stress, but to a lesser degree than equities.

Market growth: Hedge funds as a group saw annual market appreciation in each year since 2009 despite periods of negative net client flows. Data from the 2018 P&I hedge fund survey show the industry AUM grew 18.4% due to client flows and market gains.