(c)Regarding hedge fund investment, the extra layer of fees is the sole reason why the net return to an investor in a fund of funds (FOF) would be lower than that obtained from a single hedge fund.
Small investors who seek to gain better exposure with fewer risks than investing directly in securities—or even in individual funds—typically turn to FOFs. Investor receives skilled wealth management services and knowledge when they invest in a FOF.
Hedge funds pool the money of investors and make investments to generate a profit. Compared to mutual funds, for instance, hedge funds often offer more flexible investing methods.
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