It is said that one day in the crypto world is like ten years in the human world. Many people have heard that the crypto field has high returns, with yearly returns ranging from 10 to 10,000 times, seen as the last chance for ordinary people to become wealthy. The internet is filled with various anxious voices. Today, let's take a look at the annual returns of financial giants over the years.
1. Buffett's Company (Berkshire Hathaway)
Berkshire Hathaway, led by Buffett, is one of the most well-known investment entities globally. According to its long-term historical data (from 1965 when Buffett took over to the present), Berkshire Hathaway's annualized returns are exceptionally outstanding:
From 1965 to 2023, Berkshire's annualized return is approximately 19.8% (based on stock market value growth and dividend income).
In contrast, the annualized return of the S&P 500 index (including dividends) during the same period is around 10%.
Buffett's returns were higher in the early years (1960s-70s), often exceeding 20%-30%, but as the company scaled, the returns over the past decades have gradually approached 10%-15%.
2. BlackRock
BlackRock is the world's largest asset management company, primarily profiting through managing index funds, ETFs, and actively managed funds. Since its business is primarily passive investment, the annualized returns largely depend on the asset classes it manages:
BlackRock's flagship products (such as ETFs tracking the S&P 500) typically have long-term annualized returns between 7%-10%, consistent with market index performance.
For actively managed funds, returns may be slightly higher or lower, depending on specific strategies, but according to public data, the average annualized return of BlackRock's overall client assets usually fluctuates within the range of 5%-12% (depending on market conditions and after fees).
3. Hedge Funds
The returns of hedge funds vary significantly due to strategic differences (market neutral, macro trading, quantitative investing, etc.). According to industry research (such as the HFR index, Hedge Fund Research Index):
The average annualized return of global hedge funds is between 5%-15%.
Top hedge funds (such as Renaissance Technologies' Medallion Fund) may achieve annualized returns of 30%-40%, but this is an extreme exception and not open to external investors.
Over the past 20 years (2000-2020), the overall average return of hedge funds has been approximately 7%-8%, influenced by the 2008 financial crisis and competition from high-frequency trading.
4. Traditional Investment Institutions (e.g., mutual funds, pension funds)
The returns of traditional asset management institutions are usually lower because they tend to invest conservatively:
The average annualized return of global mutual funds is about 4%-8% (after fees).
Large pension funds (such as CalPERS) typically have long-term annualized returns around 6%-7%.
5. Comprehensive Historical Data Analysis
Based on the long-term performance of global financial markets (e.g., S&P 500, MSCI World Index, etc.), the annualized returns of asset management institutions are constrained by market returns and fee structures:
Long-term market averages: The annualized return of global stock markets (including dividends) is about 7%-10%, while the bond market is about 3%-5%.
Overall asset management institutions: Considering management fees (usually 0.5%-2%) and strategic differences, the net annualized returns of most institutions are between 5%-12%.
Top institutions: Such as Buffett or a few hedge funds that can sustain returns of 15%-20% or higher, but this belongs to a small exception. Overall, the annualized returns of global asset management institutions are roughly distributed as follows:
Ordinary institutions (e.g., mutual funds, most products from BlackRock): 5%-10%.
Average hedge funds: 7%-15%, with top performers exceeding 20%.
Buffett's company: Long-term about 19.8%, but has slowed in recent years.
Top industry exceptions: A few institutions may exceed 20%-30%, but this is not common.
Therefore, based on the performance of the above institutions, we can conclude that their continuous pursuit of being in the top 1 of the industry is not for high yields but for sustainable returns. As cryptocurrency users, choosing suitable investment targets that align with one's own standards is essential. For new users, a steady and mature investment approach is necessary to continuously earn money in the crypto field.
