Each fund has the same net return of £4900 after charges.  To achieve this the Hedge Fund and Active managed fund have to beat the market returns.



The Hedge Fund manager has to produce a return of over 8% and the active fund manager of 6.4% you just go with teh market, do nothing minimise costs and get just 5%. Financial advisors always sell the possibility of higer returns but do not say that 85% of fund managers do not beat the market.



The hedge fund manager has to beat the market average by 72% and the active fund manager by 28% just to equal a passive fund performance after costs.



Even more importantly even if they are able to beat the market the hedge fund manager takes 43% and active fund manager 23% of the returns for investing your money which you take all the risks.



If you believe that Active Management is necessary and you will achieve superior performance then its your choice. In some cases of niche or markets that have higher entry costs and more difficult investment decisions  then a specialist fund management is required.  However for the majority of normal investments for everyday people they will need nothing more than a passive index fund.



NOTE: The value of the investment at the end of the period is the same in all cases, but the fund manager performance and their costs to achieve the same  results are vastly different.  Listen to Warren Buffet's bet that an index fund would out perform hedge funds over a 10yr period.  He won his bet.