Fund Of Hedge Funds: Cure Or Disease?

``Mr. Quirk pointed out three ‘facts' regarding FoHFs and Madoff... very few FoHFs, and no leading institutional firms, were invested with Madoff (this was a fairly damning critique of UBP, Man Group and UBS whose FoHF units were all invested)... many investing funds were ‘feeder funds' and not FoHFs... most FoHFs refused to invest in Madoff... Robert Huebscher also pointed out that in 2008 the HFRI FoHF Composite Index (-20.7%) outperformed the S&P 500 (-37%) by over 16% and the Yale Endowment (-25%) by over 4%. The FoHF Index did this with less than half the volatility of the S&P 500 (and about the same as Yale).''