Bob Jaeger, Vice Chairman of EACM Advisors, dispels some of the common myths about the hedge fund world, and outlines ways to properly evaluate them. His observations include:

• There are certainly some very aggressive managers willing to make large leveraged bets, but most hedge fund managers are devoted to consistency of return.
• The reason for investing in hedge funds is not to capture some “average return,” but to earn a superior return by making intelligent decisions about strategies and managers.
• The manager who is charging “1 and 20” has to demonstrate that he or she can add value relative to a mechanical implementation of the underlying trading style.
• The heterogeneous strategies are the portion of the hedge fund universe where it is especially dangerous to make glib generalizations about “what hedge funds are doing.

The preceding information is based upon the analysis of historical performance of various asset classes and assumptions with respect to future economic conditions. Past performance is not an indication of future results. This information is not intended to provide specific advice, recommendations or projected returns of any particular BNY Mellon Asset Management product.