“Well, since it seems that Bogleheadedness is seriously out of fashion nowadays, we might as well just go whole hog. Over at FWF (the Canadian cousin to Bogleheads), one of our long time members had been running a “pick your best three stocks and live with them for a year” contest for a few years. This year, he decided he didn’t want to do it again so I created a variant. It’s too late to get in on that contest (and why would you want to do it with Canadian stocks?) but, as the infrastructure is now all built, I thought I’d offer another up here for those who are interested.” – Norbert Schlenker, The Boglehead Hedge Fund Contest, January 3, 2009.
With these words the Bogleheads Hedge Fund contest entered the world. The contest is now conducted annually on the Bogleheads Forum. The contest allows contestants to try their hand at security selection. Participants select US stocks, both long and short positions, and the game begins. (This is an academic exercise; no actual stocks are bought or shorted). The contest is announced in early January and is open for registration for one week. The rules of the contest have been standard since its inception.
The rules:
- Pick a fancy name for your hedge fund.
- Before 9:30 am EST on 7 January, pick up to three stocks to go long and up to three to short. Equal dollar amounts are placed on each position, long or short.
- Opening prices will be based on Jan 7th close.
- No trades during the year, except that you can elect at any time during normal exchange business hours to “freeze” a price for any individual position at that day’s closing price, i.e. liquidate any position. (Each position carries this option; you can choose to freeze different positions on different days.) Other than that, you’re stuck with what you choose for the year.
- If a stock is taken out in a merger or a bankruptcy during the year, we will do our best to do the right thing. An all cash offer will result in a freeze at the takeout price. An all stock offer will result in the conversion of the position to the acquiring company’s shares. Mixed cash and stock offers, you’ll just have to trust me to saw things off fairly.
- The universe from which to choose is the Russell 3000. Dividends are not counted.
The table below provides the annual winner as well as statistical information regarding the yearly performance of contestant portfolios. Results are consistent with the observation that individual stocks are extremely risky, yet the wide dispersion of returns provides ample entertainment value during the course of the year.
Bogleheads Hedge Fund Contest: Historical Results[1] [2]
| Year | Winner | Highest Return | Lowest return | Average return | Median return |
| 2021 | JamalJones, SOOCmpt Random Securities Limited, | 191.28% | -338.86% | -0.41% | 8.83% |
| 2020 | Monkeydart Hedge (happyisland) | 197.87% | -291.57 | -24.1% | -3.88% |
| 2019 | Diversified Ultra Safe Admirals Fund (ccieemeritus) | 98.51% | -61.70% | 8.10% | 6.83% |
| 2018 | The Bet Against Eddie Fund (whodidntante) | 92.11% | -71.97% | 4.46% | 3.36% |
| 2017 | Better Lucky Than Good (Tanelorn) | 94.06% | -95.47% | 0.21% | -5.50% |
| 2016 | Better Lucky Than Good (Tanelorn) | 99.66% | N/A | N/A | N/A |
| 2015 | Play to Win (Tanelorn) | 57.10% | -68.60% | -0.40% | 2.50% |
| 2014 | Monkey See Monkey Do Fund (SP-diceman) | 44.30% | -57.30% | -3.67% | 6.83% |
| 2013 | New Deal Hedgefund (BHCadet) | 52.40% | -66.10% | -3.53% | 0.60% |
| 2012 | Rock Soft Holdings (camper) | 62.40% | -35.60% | 5.63% | 2.20% |
| 2011 | The 100% Loss Guaranteed Return Fund (SP-diceman) | 35.70% | -26.40% | -0.36% | 0.00% |
| 2010 | Special Opportunity Brokers Trend Reversal 2010 (Snowjob) | 30.00% | -29.20% | 1.22% | 3.40% |
| 2009 | The Masters of the Universe Hedge Fund (gchan) | 324.40% | -62.00% | 23.49% | 21.80% |
Notes
[1] The 2017 year end results spreadsheet is partially broken, with approximately half of the results inaccessible.
[2] The 2016 year end results spreadsheet is completely broken, with no results accessible.
Additional information
Links to forum topic announcements and result spreadsheets, blog articles on the contest, and information pertaining to performance benchmarkes can be accessed below:
The table below provides forum links to topics announcing each annual contest and the links reporting final results. The forum announcement topics contain continuing commentary throughout the year. The contest was introduced in 2009.
Note that the 2016 year end results spreadsheet link is completely broken, with no results available. Note also that the 2017 year end results spreadsheet is partially broken, with approximately half of the results inaccessible.
Financial Page posts regarding the Bogleheads Hedge Fund Contest are provided for your convenience.
From 2018 through 2020 the contest managers began constructing risk adjusted benchmarks to help measure contestant performance. After 2020 the contest managers benchmarked contest returns to the Vanguard Total Stock Market fund. The following table provides data for the 2018 -2020 period:
Contest Benchmark returns
| Year | Benchmark return | Contestant average |
| 2020 | 16.84% | -24.21% |
| 2019 | 9.39% | 8.10% |
| 2018 | 4.84% | 4.46% |
A majority of contestants have failed to match benchmark returns. In the table below, the first two columns provide the percentage of contestants who have out performed and under performed the benchmark. The following two columns breakdown the average returns of each group.
| Year | Out performers | Under performers | Out performer average return | Under performer average return |
| 2020 | 34% | 66% | 67.24% | -80.02% |
| 2019 | 39% | 61% | 34.19% | -8.67% |
| 2018 | 46% | 54% | 26.83% | -14.37% |
While not a benchmark, we can compare contestant returns with the Vanguard Market Neutral Fund. It is important to remember that the contest is price-only, and does not include dividends. The market neutral fund receives dividends on its long positions, but must pay out dividends on the shorted stocks which it has borrowed from lenders.
Contest returns vs. mutual fund returns
| Year | Contest average return | Fund annual return |
| 2021 | -0.41% | 0.05% |
| 2020 | -24.21% | -11.57% |
| 2019 | 8.23% | -9.57% |
| 2018 | 4.46% | 0.59% |
| 2017 | -3.41% | -4.89% |
| 2016 | N/A | 2.62% |
| 2015 | -0.40% | 5.41% |
| 2014 | -3.67% | 4.26% |
| 2013 | -3.53% | 8.59% |
| 2012 | 5.63% | -1.50% |
| 2011 | -0.36% | 7.80% |
| 2010 | 1.22% | -1.03% |
| 2009 | 23.49% | -11.38% |
2020 charts
2019 charts
2018 charts
