There were two articles in the WSJ this morning about the troubles some active managers are having this year. This first focused on global macro hedge funds and the second focused on go anywhere global mutual funds. Here are the links if you are a subscriber:
This is not surprising as global macro hedge funds and go anywhere global mutual funds follow similar strategies----looking anywhere in the world for returns. The fact that they have under-performed the market this year doesn't mean they are flawed, it is a reflection on what type of market we have had----choppiness (large up days or months, followed by large down days or months) and the immense risk.
Choppy markets have made it difficult for many managers to find areas to invest in, either using some sort of trend analysis, value based analysis, etc. The risk has also most likely forced many managers to take a conservative approach.
Bottom line is that if I was an individual investor, in the face of the risk of this market, I would still feel much more comfortable with a global macro fund or a go anywhere global mutual fund than an index fund or an active manager who is just a closet indexer.