Hedge funds performed better under Democratic presidents than Republican ones, history shows

Published On Nov 12, 2024, 3:17 PM

A recent analysis shows that hedge funds have historically performed better under Democratic presidents compared to Republican presidents. Specifically, under Democratic administrations, hedge funds delivered an average annual return of 10.16%, while the S&P 500 returned 11.99%, leading to a 183 basis point gap. Under Republican administrations, however, hedge funds had a larger underperformance gap of 331 basis points compared to the S&P 500. Despite the higher net asset flows during Republican administrations (about $450 billion), hedge funds were found to correlate more closely with positioning against various asset classes rather than specific policies from any administration. As hedge fund managers prepare for changes in their portfolios in anticipation of the ongoing political landscape, further developments in this space are expected to be analyzed in upcoming events like the Delivering Alpha summit.