July 31, 2006

Benefits of Hedge Funds

If you invest in a fund of funds rather than a single hedge fund, you will get more diversification. Risk levels decline as diversification increases. It depends on investors as to whether they want a low risk product or not. Some funds of funds offer consistent absolute returns. They could offer better transparency and liquidity than some other single funds.

You will also be benefited from going with funds of funds in terms of the due diligence process that they can deliver. Individual investors may not have the expertise, but they have the systems in place to do the necessary research and due diligence on these hedge funds to extract maximum benefits.

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