Sygnia’s decision last week to close all of its hedge funds has raised important questions about this industry. What are hedge funds supposed to do, and how should investors judge whether they are delivering? In particular, many investors have been asking how you should measure their performance against traditional unit trusts. Since balanced funds are also designed to manage risk while delivering returns close to the stock market, are they directly comparable? While this may seem logical, Werner Opperman from 27four Investment Managers says that contrasting these strategies against each other may not be entirely the right approach.