Despite Economic Downturn, Hedge Funds Remain Popular With the Wealthy

A Bank of America survey found that hedge funds are still popular with the rich.

The survey, of 400 clients with $3 million or more in investible assets, found that more than half of those with hedge-fund investments were “satisfied” with the funds’ performance.

According to Hedge Fund Research, the hedge-fund industry was down 3.2% for the month through July 24. That’s the worst July performance since the research firm starting tracking the business in 1990, and the worst monthly performance since 2000.

Yet stocks have fared even worse. The S&P is down 16% for the year, and the Dow is down about the same.

The survey also found that investors who had held hedge funds the longest were the most satisfied. Those who had been investing in hedge funds for 10 years or more were twice as likely as those with less experience to be “extremely satisfied."

Excerpted from the Wall Street Journal Wealth Report