The HEDGEweb rating is based on a proprietary ratio. It is a risk/reward/potential ratio calculated over the lifetime of a fund.

If the performance record is less than 24 months it will not be calculated amid possible distortions.

The HEDGEweb ratio is one of the few ratios that takes a fund's leverage into consideration. Some strategies rely on leverage and might therefore have a slightly worse rating than others. The rating does not discriminate funds with a high leverage but it is worth remembering that either illiquid assets or leverage are the most common causes for the demise of a fund.

Like every other ratio, the HEDGEweb rating should be regarded in context with the strategy and other ratios and it should not be relied upon as a single measure of a fund's performance.

Please be also aware that under certain conditions the HEDGEweb ratio may lead to wrong results, either positive or negative.