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Today’s high risk, low interest rate environment presents a dilemma for prudent trustees seeking to meet the needs of both income and remainder beneficiaries. A portfolio dominated by bonds is likely to feel much more comfortable, but deliver little income, as well as meager growth for the remaindermen. On the other hand, adding to equities doesn’t feel appropriate in today’s uncertain environment.
This makes hedge funds seem appealing to many trustees. Can this asset class really add to the expected returns of a trust with limited stock market exposure? If so, how would it affect the income the portfolio generates? We’ll explore these investment considerations, without addressing contractual, fiduciary or legal considerations.1
Our re...
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