Study says funds of hedge funds see limited diversification benefits

RiskNet – Fund of hedge funds (FoHF) portfolios with more than 25 underlying managers have weaker performance and increased tail risk, according to research from New York University’s Stern School of Business

Investing in hedge funds can be a risky business. For this reason, it is logical to assume funds of hedge funds (FoHFs) should protect themselves by diversifying across as many underlying hedge funds as possible.

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