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Which of the following statements regarding hedge funds are true?

6. Which of the following statements regarding hedge funds are true?

  • Hedge fund managers usually charge fees on both the the assets they manage but also on the performance they deliver.
  • Their fundamental objective is to achieve positive performance irrespective of market conditions.
  • The first “long-short” equity fund was created by Alfred Winslow Jones because he wanted to bet on the over-performance of some firms and the under-performance of other firms while having a neutral view on the direction of the stock market as a whole.
  • They have to be permanently invested.
  • Hedge fund managers are asked by their clients to invest a significant part of their own wealth in the fund they manage to make sure that they will not pursue some silly strategy.
  • Leverage has the advantage of boosting positive gains while not affecting losses.