Here are data on three hedge funds. Each fund charges its investors an incentive fee of 20% of total returns. Suppose initially that a fund of funds manager buys equal amounts of each of these funds and also charges its investors a 20% incentive fee. For simplicity, assume also that management fees other than incentive fees are zero for all funds Hedge Fund 1 Hedge Fund 2 Hedge Fund 3 AUM (initial) 100 100 100 Gross return 12 13 (%) -20 What is the rate of returns for investing in the fund of funds (assume that Funds of Funds start with 300 AUM)? Select one: +5% +2% +3% -2% O 0%