Two of the crucial areas which investors are looking for in hedge funds include volatility and suitability, an expert has claimed.
Two of the crucial areas which investors are looking for in hedge funds include volatility and suitability, an expert has claimed.
Mike Parsons, head of UK retail sales at JP Morgan Asset Management, has highlighted the fact that these areas are often being overlooked in favour of performance, which frequently provides cautious investors with an inaccurate way of identifying suitable vehicles.
“We would urge investors to look further into the underlying characteristics of funds in this sector. Just because a fund is in the sector doesn’t necessarily mean it fits an investor’s idea of ‘cautious’,” he explained.
Mr Parsons added that those investors looking for a low-risk option must consider both the underlying volatility of the investment and the capital protection afforded by holding a balanced portfolio.
Late last month, the Association of Investment Companies announced that it will be changing the way it presents hedge fund gearing data in order to provide both the gross and net gearing figures, with the latter taking both cash and cash equivalents into account.
