What is a characteristic that makes a hedge fund unsuitable for certain investors?

A characteristic that makes a hedge fund unsuitable for certain investors is access to funds. Hedge funds typically have higher investment minimums and may have restrictions on who can invest, often requiring individuals to be accredited investors or to meet specific financial criteria. This exclusivity can limit access for many potential investors, particularly those who may not meet the necessary financial thresholds.

Hedge funds often employ complex investment strategies and can have significant barriers to entry, which can be off-putting for more risk-averse investors or those with lower net worths. The other options, such as high liquidity, low levels of risk, and guaranteed returns, do not apply as characteristics that would make hedge funds unsuitable; in fact, hedge funds can often be illiquid, may involve substantial risks, and do not guarantee returns, making their structure and investor requirements crucial factors to consider.