A Warning on Hedge Funds

The growth in hedge fund assets in recent years has been driven by the high profits of the fund managers, not by the filling of a genuine market need. People don't need a license or a degree or even any experience in order to start a hedge fund. Also, there are numerous shortcomings inherent in the hedge fund structure, including a lack of liquidity, a lack of transparency, and tax inefficiency. And fees tend to be high, an average of 1.5% of assets and rising. Most investors would be better off disregarding hedge funds entirely.