AlphaClone: Over 70% Of Portfolios Outperformed the S&P 500 in 2009 ~ market folly

Friday, January 22, 2010

AlphaClone: Over 70% Of Portfolios Outperformed the S&P 500 in 2009

We came across a recent press release and were quite impressed with Alphaclone's performance results from their 3,100 possible clones. In 2009, over 70% of their portfolios outperformed the S&P 500 and over half of the clones outperformed the S&P by 10% or more. Needless to say, this is some impressive stuff and we wanted to highlight it given our fascination with hedge fund replication.

Here is a table with the top performing single fund clones for 2009. These portfolios take the top 20 holdings of single hedge funds and combine them into a portfolio:

Rank Fund Return
1 Eagle Value Partners (Witmer) 220.8%
2 Mohnish Pabrai 171.0%
3 Silver Point Capital 167.3%
4 Tracer Capital Management 125.9%
5 Pershing Square Capital Management 123.7%
6 Elliott Management 122.9%
7 Pamet Capital Management 121.7%
8 Greywolf Capital Management 120.9%
9 Artis Capital Management 118.2%
10 Kayne Anderson Capital Advisors 116.7%

As you can see, there are some well known hedge funds on this list and Alphaclone easily replicated them for solid results.

We also want to point out that the Tiger Cubs top 10 most popular holdings clone returned over 59% in 2009. We cover a ton of the Tiger Cub hedge funds here on the site and this outperformance is why. This portfolio takes the most popular holdings amongst these various funds and assembles them into a single cohesive portfolio.

Really impressive stuff and this just goes to show that if done right, hedge fund replication not only works, but it outperforms. Alphaclone currently has a free 14-day trial so definitely check it out as we use it for all our hedge fund replication needs.

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