Hedge funds share some broad characteristics due to their entrepreneurial approach to investing as outlined below.

• Hedge funds are designed to generate positive returns independent of general directional movement in the stock and bond markets¹
  The hallmark of hedge funds is the pursuit of absolute returns. This means the manager aims to generate positive returns, in both rising and falling market conditions, with the intention to preserve capital.
• The success of hedge funds is not measured against a benchmark
  Since hedge fund managers strive for absolute returns, success or failure is not always measured by reference to a benchmark such as the S&P 500 Index. For example, if a hedge fund manager aims to achieve a positive annualized return, the manager gauges its success relative to that objective, not in terms of underperformance or out-performance relative to the S&P 500 Index.
• Hedge funds use diverse investment strategies and techniques compared with traditional approaches to investment
  Hedge funds may trade a number of different asset classes and a wide range of financial instruments while employing a variety of investment styles, strategies and techniques in diverse markets.
• The success of hedge funds depends on manager skill, not solely on asset class appreciation
  The performance of hedge funds is determined mainly by the skills of their managers.

¹As is the case with all investments, alternative investments entail risk and their value may go down as well as up. A manager may have negative returns in both rising and falling market conditions. Please see “Risk Factors” in the Prospectus.