Fatal distraction

THEY are sometimes portrayed as invincible, with enough cunning to outfox financial markets and enough clout to outgun governments. But hedge funds have been bested by an unassuming rival: exchange-traded funds (ETFs). These claim no special expertise, just the ability to make average returns at minimal cost. In 1999 ETFs controlled a mere tenth of the assets of hedge funds; today they have more money under management. The rise of ETFs is welcome, but hedge funds, which frequently charge both a 2% annual fee and 20% of performance, are still raking in money. For the pension schemes that are the hedgies’ latest target, handing over cash makes no sense.