Wednesday, January 25, 2006

Hedge funds slowing but still growing

Inflows into the red-hot hedge fund industry cooled a bit in 2005...they only brought in $40 billion in new investments. That's just a 4% increase for the year compared with 19% in 2004.

While growth has slowed, don't expect hedge funds to go away, they have a legitimate place in the market. Besides, they continue to outperform the broad market. The Hennessee Hedge Fund Index rose 8.03% in 2005 while the S&P 500 showed just a 4.9% gain.

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