The AI hedge fund Situational Awareness returned more than 1,000% between its launch in late 2024 and June 2026. Then, in a single month, it fell 67%. It is still up roughly 80% for the year. Most of the people who own it are not.
That gap is the difference between fund return versus investor return, and the average investor is almost always on the wrong side of it. The exceptional gains were earned on a few hundred million dollars. The losses were suffered on more than $20 billion, most of which arrived after the performance had already happened. Only an investor who was there in January is up 80%, and very few of the dollars were there in January.