Morningstar's John Rekenthaler compared the pros and cons of hedge funds of funds vs target-date funds. The hedge fund investors, who bought a high-cost, complex and opaque investment, fared better during the downturn than target-date fund investors, whose vehicle was low-cost, simple and transparent. But in the long-term, low cost investments have won out, Rekenthaler said.

Target date funds cash flows were consistently positive and have outgained hedge funds of funds since the middle of the aughts.:

It doesn't make much sense to me that becoming wealthier and more informed leads to worse investment results ... but with hedge funds, that does indeed seem to be the case.

Read the full story here. 

Edited by: Casey Quinlan


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