What is NOT an important consideration when evaluating hedge fund returns?

When evaluating hedge fund returns, focusing solely on short positions is not a comprehensive consideration. While short positions are indeed a component of hedge fund strategies, a thorough evaluation requires a broader perspective that encompasses various strategies employed by the fund, including long positions, the use of leverage, and the derivatives used in the portfolio.

Understanding the impact of all positions (both long and short) is essential, as well as assessing how leverage can amplify returns and risks. Additionally, a complete evaluation involves considering the full notional value of positions, which reflects the total exposure of the fund.

By focusing only on short positions, one risks missing critical elements that can affect the overall performance and risk profile of the hedge fund, leading to a skewed understanding of its returns.