If the current state of hedge fund returns weren't bad enough, Barclays Capital says they may actually be even worse. According to Barclays, The Times of London reports, hedge fund performance may be overstated by between one and six percentage points a year, which would have HF returns lagging behind other forms of investment. Barclays blames the potentially misleading results on the way hedge fund indices are put together and the way they treat survivorship bias (they don't always count hedge funds when they close or are close to closing), the fact that hedge fund managers choose to avoid reporting figures of poor performers, and that some indices wait for a strong performance period before reporting results. Tim Bond, author of Barclays' Equity Gilt Study, told The Times, "If you take some indices at face value, you are getting a flattering picture of the industry," but it may not be real. Still, Bond said hedge fund managers were worth the extra fees they charge because of their investment skills.