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  • Editor’s Picks / 23 May 2016 at 14:00 GMT

    Big returns don't come easy for fund investors

    Bloomberg
    In the hunt to beat hedge funds, big returns don't come easy, says Bloomberg Gadfly columnist Lisa Abramowicz. "If investors want to win big in the current market, they need to be prepared to do a lot of work. Otherwise, they might as well just go to Las Vegas and try their luck at the tables," Abramowicz says. Good returns this year have come at debt-focused closed-end funds, which have shares that trade daily, pay dividends and use leverage to buy fixed-income securities, she says. Those funds delivered returns of about 9.5% on average in less than three months. "That's remarkable in an ultra-low yield world, especially when macroeconomic strategies have been hammered by unpredictable market swings." The reason closed-end funds have gained so much is that they are also "a hotbed of activism from the funds' shareholders," Abramowicz says. Such funds spotlight the fact that big returns don't come easy at this point, but require diligence, effort and sometimes intervention, she says.
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