Hedge Funds For Dummies Pdf Free BETTER 32
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Hedge funds are actively managed by professional managers who buy and sell certain investments with the stated aim of exceeding the returns of the markets, or some sector or index of the markets. Hedge funds aim for the greatest possible returns and take the greatest risks while trying to achieve them. They are more loosely regulated than competing products, with the flexibility to invest in options and derivatives and esoteric investments that mutual funds cannot.
Individual investors, small institutional investors, and others may also contribute to a hedge fund; large institutions such as mutual funds and pension funds all have hedge fund exposure. This tends to be a major part of any well-diversified portfolio. Trending toward the end of the business cycle, this type of exposure by large institutions may persist for some time.
Funds are being created to provide hedge fund-like investments to retail investors, with terms and returns often looking like those of an actively managed hedge fund; but offering only a fraction of fees paid by the hedge fund industry.
They may, for instance, offer the promise of annual returns between 3% and 10%, or a combination of an active trading strategy and a long-term investment philosophy.. Due to the use of a hedge fund approach in these investment products, they are known as hedge fund or high-performance-trading mutual funds.
Why do people invest in hedge funds? A wealthy individual who can afford to diversify into a hedge fund might be attracted to the reputation of its manager, the specific assets in which the fund is invested, or the unique strategy that it employs.
Hedge funds form an important subset of the alternative investments opportunity set, but they come with many pros and cons in their use and application across different asset classes and investment approaches. The basic tradeoff is whether the added fees typically involved with hedge fund investing result in sufficient additional alpha and portfolio diversification benefits to justify the high fee levels. This is an ongoing industry debate. d2c66b5586