MLC warns against hedge funds

MLC Investment's chief investment manager has criticised hedge funds, saying there is little evidence that they produce higher returns than traditional managed funds. Chris Condon, who was speaking to superannuation trustees at an MLC-sponsored conference, said that claims by some hedge funds that they carried lower risk than traditional funds were largely “illusory”. He said that hedge fund managers were no more skillful than traditional fund managers. Mr Condon commented that the recent negative superannuation returns had given rise to the notion that hedge funds were a “silver bullet”. He said higher returns will only come from skill and investment opportunities and he recommended that trustees free up the mandates of traditional managers.