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> Wouldn’t it be fairer to compare against a leveraged ETF?

No, it's actually the reverse. You have to compare at equal annual vol, and the S&P already has something like 20%. Most HF operate around 10% on AUM.




> No, it's actually the reverse. You have to compare at equal annual vol, and the S&P already has something like 20%.

Stop thinking like a hedge fund.

TQQQ commonly is used as a benchmark because it represents a low-friction, practical alternative to VTI, VOO, and even private equity investments including hedge funds trading public securities.

Once your Sharpe is high enough, you stop caring about volatility. The only volatility is how many zeros in your almost-always positive PnL.

Hedge funds (and traditional asset managers) care about drawdown, vol, sortino, beta and all that shit. But hedge funds have a different business model than prop trading firms.




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