Liquid vs. Traditional Hedge Funds and Alternatives: Accessing the Right Strategies

Mutual funds are required to provide daily liquidity to investors. While daily liquidity in a vacuum is valuable, this requirement, in the context of hedge fund strategies, severely limits a manager’s ability to execute many strategies effectively.

Because of daily liquidity requirements, only a portion of hedge fund strategies can be successfully implemented in a mutual fund structure. The strategies that in theory lend themselves best to a mutual fund format include: managed futures, global macro, and long/short equity strategies oriented towards long-biased, large-cap, and diversified.

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