HDGE is taking a beating for the last two years. This is one of my worse investments for the past year. Part of it can be blamed on the rising stock market as a whole but part of it must be blamed on poor short selling stock selection by the managers of this fund. There are stocks that have gone down in flames but apparently HDGE is not holding these stocks. At this point, I have lost 5k on HDGE and, even though it continues to go down on a weekly/monthly basis, I think the right call is to continue to hold on to my position under the theory that every dog has his day. Market has so hot that it has to cool down and when it does, HDGE should go up and I might be able to recover some of my losses, and then I would probably bail out of HDGE. HDGE has such a miserable track record but financial advisors continue to recommend it as a "hedge" against the stock market. I think it works as a theory but in reality, HDGE does nothing but lose money for you.
awhile back I sold my HDGE position for a loss, though ironically after yesterday's bearish action, HDGE is now above my selling price.
This shows at least that HDGE has the ability to rebound quickly when the market tanks. If we enter a period of severe decline in the near future you will make back some or all of your money.
I didn't sell because I think HDGE is a bad investment necessarily, but because whether it's good or bad depends on conditions we can't predict. No one can predict what the market is going to do. No one knows how long an uptrend or a downtrend is going to last. At some point HDGE is going to shine, but we don't know if that's going to be 5 days from now, 5 weeks, or 5 years.
If you buy HDGE too soon you risk losing a lot of money, but no one knows what is too soon. Someone will get lucky and buy this on the down day that turns into the beginning of a 2 year bear market. Others will buy it on a down day that precedes a 6 month rally.
If you hold HDGE and are long stocks you also have the psychological stress of making opposing bets in the market. You want your stocks to rise but you don't want HDGE to fall too much. Crazy.
I've decided that, for me, EDV is a better longterm hedge. It's far from a perfect solution, of course. But at least it pays a dividend when the market is rising. With HDGE not only do you not collect a dividend, you have expenses deducted.
I agree that the over 3% management fee takes the cream from the top leaving waterdown results for the investor. With so many alternative ways to take advantage of weakness it a wonder w
hy anyone would have a penny here.