HIGH FEES FOR RETAIL hedge funds will not cause investors to shy away from the complex investment product, but educating investors will be the key issue, according to industry experts.
'While you can expect some sensitivities to fees, it is ultimately the net return which is of concern,' Schroder Hedge Funds associate director Nicholas Chalmers said.
Sun Hung Kai Financial Management chief executive Christophe Lee said: 'When properly explained [about the cost and product benefits], investors said it is fair - it is the net return that counts.'
Mr Chalmers said it was a matter of educating retail investors about the diversification of benefits associated with hedge funds as well as their ability to protect capital in a weak market environment.
'Retail investors need to understand these dynamics and how to capture them,' Mr Chalmers said.
He said service providers would probably not lower fees to attract retail investors as it would compromise the viability of the business.