A quick glance on the Barron’s top 10 performing hedge funds in 2012 on a three-year CAGR return (excluding 2009 performance), reveals the following:
1) Size does matter. The top 10 hedge funds typically have AUM under $12 billion. But it cannot be too small as it will not attract investors and in turn be held captive by its size.
2) Most top performers are confined to fixed income space, particularly asset- and mortgage-backed securities. This reveals that securities that were hammered down will eventually recover back to the mean.
Read more here: Barron
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