Real Time Hedge Fund Tracking Results

In my book The Ivy Portfolio we touched on three hedge funds that we thought made sense to follow their long stock picks.  We presented hypothetical results for following their top 10 holdings updated quarterly from 2000-2008.  It is nice to see that those three funds (Blue Ridge, Greenlight, Berkshire) on average have outperformed the S&P500 by about 3.5% per year since publication in real time (2009 – 12/2010).

All data courtesy AlphaClone.

Later in the chapter I included a list of 54 funds that I thought would be interesting funds to follow.  Out of that 54, 8 were never added to the database and 4 have since ceased operations.

Excluding the dead and never added, the other 42 funds beat the S&P 500 by an average amount of 13 percentage points per year.

Even if you included a super conservative -20% return per year for the dead funds the group would have averaged an over 8 percentage points per year outperformance.

Roughly 70% of the funds beat the S&P500 over the time period.  Impressive real time results!

The best performing fund from my short list was Pabrai up over 300% and the worst was Tontine who was flat.  Mohnish’s clone is up a whopping 60% YTD with top holdings including POT, HNR, BPO, CRESV, and ATSG.