According to Hedge Fund Research Index (HFRI), hedge funds this year returned a paltry 3.5 percent, while the S&P doubled that number. Further, the HFRI Composite Index added just half a percent in May, though the market added a whole percent. After eight years of bull market and strong gains in the S&P, hedge funds continue to underperform compared to indexed funds.Hedge funds have had a difficult year. Stock market volatility (especially the S&P 500) has squashed gains for most “smart money” funds, except for those holding Bitcoin.