Why it pays to protect clients from their underlying investments

PIPS

Funds of hedge funds are meant to produce absolute returns. So why should intermediaries want to buy them with a protected wrapper

Considering the suitability of hedge funds is becoming an important part of the asset allocation process for intermediaries advising retail clients on their investment portfolios. Here we will look at the circumstances in which hedge funds of funds and guaranteed hedge fund products are being used and explain why. We will also look at why, in some circumstances, funds that come with a guarantee are appropriate while in others they are not. Firstly, what is the investment case for including hedge funds in a retail investment portfolio? Although a gross oversimplification, most advisers incl...