CFA Practice Question
A primary difference between a multi-strategy hedge fund and a fund of funds is:
A. the different investment structures.
B. the extra layer of fees associated with a fund of funds.
C. the different strategies they specialize in.
Explanation: Large, multi-strategy funds are an alternative to funds of funds.
User Contributed Comments 3
| User | Comment |
|---|---|
| tomalot | What? That have totally different strategies i.e. main diff |
| ascruggs92 | No, the strategies are the same in the sense that they are multi-strategy. The difference is that one is a single hedge fund with multiple strategies and the other invests in multiple hedge funds, each with different strategies. The primary difference is therefore the fee structure |
| BossMan | The answer must be "C". A fund of fund that invests in ETFs for example may not be more expensive. The fund of fund and the multi-strat hedge fund (a single fund) are entirely different strategies. |