Funds-of-Funds Proven to Justify Fees-on-Fees Despite Lower Returns.
Funds-of-funds may seem like they don't add value because their returns are lower than hedge funds. But when comparing them to what an investor could achieve on their own, funds-of-funds actually do deserve their fees. The researchers used certain concepts to estimate the true benchmark for funds-of-funds, and found that, on average, they are worth the fees they charge.