A fund of hedge funds is an investment vehicle that allocates its investors money to many different hedge funds. A good fund of funds will deliver consistent returns with lower volatility than traditional asset classes or a more concentrated, self-selected portfolio of hedge funds. A fund of funds is not a random composition of hedge fund strategies. Rather, it is a combination of uncorrelated strategies that creates an optimal portfolio that generates stable returns with low volatility under most market conditions. A fund of hedge funds allows the investor to conservatively incorporate hedge funds into a traditional portfolio. Generally speaking, most institutions, pension funds, endowment funds, private banks and family offices have preferred to utilize the fund of funds approach.

Past performance is not necessarily indicative of future results.