Hedge fund-like or hedge fund-lite? Traditional risks and returns from an old favourite

Hedge funds have been blamed for many investment ills but their underlying investment strategy remains strong as the new alternative Ucits products are proving.

Investors still have the very sceptical view of hedge funds as illiquid, opaque, expensive and ridden with fraud. Yet the strategies they use to generate good results without the volatility of equity markets or the low yields of bonds still hold true and are at the heart of NN Investment Partners’ Willem Van Dommelen’s investment strategy.

He describes what he calls his ‘hedge fund replicator’ and how it offers hedge-fund type returns without their traditional drawbacks in a liquid, highly regulated Ucits wrapper, priced at sub-100 basis point without a performance fee in sight.

The logic behind how the returns are generated are traditional, the structure is not. 

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