NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.
Advertiser Disclosure

Retail investors made 35% more profit than hedge funds in 2020

Retail investors made 35% more profit than hedge funds in 2020
Image source: Getty Images


It seems the tables may be turning in the world of investing. No longer are small retail investors being bullied by the big hedge funds. There’s been a lot of changes for individual investors over the last few years. It’s now easier and cheaper than ever and it looks like many people are beating the professionals.

Plot your path towards financial freedom with our Hero’s Journey tool!

MyWalletHero is here to help you learn about taking control of your money, whether that’s paying off debt, working towards a short-term money goal, or investing for your future.

This tool can help you understand the next steps on your journey – simply choose a goal that best describes your current interests to get started.

New data from trading platform Stake shows some exciting truths. Read on to find out what they’ve learnt and how you can be a part of the financial revolution.

What were hedge fund returns in 2020?

Hedge funds have been hitting the news quite a lot recently. This has mostly been as the villains in the short squeeze saga involving GameStop.

Putting aside all emotions, the important thing to understand about hedge funds is that they’re all about making money. Not only is that their goal, but they’re very good at it.

Data obtained from HFM (hedge fund data and intelligence) shows that during 2020, the average return for hedge funds was 12.3%. By any standards this is more than respectable, especially considering this was during the coronavirus pandemic. However, these profits were dwarfed by the achievements of regular retail investors.

How much did regular investors make?

Lately, retail investors and hedge funds have been compared to David and Goliath. Where hedge funds are organised groups of professional investors, retail investors are people like me and you.

Compare stocks and shares ISAs

If you’re planning to open a stocks and shares ISA, choosing the right platform is important. To help you narrow down the choices, we’ve created a list of some of the top stocks and shares ISAs.

There’s been a huge surge in new investors this past year. What’s amazing about this is that many of these people have been successful with their investing. The data from Stake shows that, on average, retail investors made a whopping 47% profit last year!

Matthew Leibowitz, CEO of Stake explains: “While the recent volatility and market interest has contributed to our growth, it’s really just the tip of the iceberg of a deeper trend that has been fuelling rapid growth through 2020 and into 2021. More and more retail investors are recognising the incredible opportunity of the US market, one worth $37 trillion and home to some of the world’s largest and most exciting companies. So far this year, 75,000 customers across the globe signed up to Stake, and we have seen over 500,000 trades executed totalling over $800 million.”

How do I get involved in the investing movement?

If you want to become an investor, we have loads of resources available here at MyWalletHero, and over at The Motley Fool, that you can check out. After developing an understanding of the markets, you can begin creating your very own investing strategy.

Once you have a plan, the next step is finding an investing platform that suits your style. There’s no single best option out there. We’ve done a lot of research to help you out by putting together our top-rated share dealing accounts.

The one that fits you best will depend on your approach. However, for long-term investing it’s often best to select an account with low fees. Otherwise, these costs will eat into your returns. Setting up a stocks and shares ISA can also be a great move because this can shield your investments from tax obligations.

It’s really important to remember that there’s no guarantee you’ll make money when investing. This is especially so if you just start investing blindly, following absurd trading tips from sources like TikTok

Are you making these 3 common investing mistakes?

These all-too-common investing errors can cause you to miss out on the long-term wealth-building power that shares can hold….

To help you side-step these pitfalls, and move forward on your path to wealth-building, we’ve created a free report, “The 3 Worst Mistakes New Investors Make”.

Just enter you best email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.


Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.