Todays Lesson: What is HEDGE FUND?
Hedge funds are are one of the fastest growing investment alternatives to traditional equity and bond portfolios. The term hedge fund is applied to investment vehicles with a wide range of aggressive investment strategies and objectives. Until recently, investing in hedge funds has only been open to the wealthy investors. Now you can invest in a hedge fund with as little as $1000.
What is the difference between a Hedge Fund and a Mutual Fund?
The main difference between hedge funds and mutual funds is how they are regulated. Mutual funds are one of the most highly regulated investment instruments on the market, while hedge funds have virtually no regulation and investment restrictions. As a result hedge fund managers have more flexibility than traditional mutual fund managers in structuring their portfolios. Hedge funds are also able to use strategies such as futures and currencies. These riskier strategies give them the potential of earning a higher return than traditional mutual funds. Of course, this can also result in a greater loss than what one might traditionally find with mutual funds
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A hedge fund is an investment fund that pools capital from accredited individuals or institutional investors and invests it in a wide range of assets using various investment strategies. Hedge funds are typically managed by professional investment managers, also known as hedge fund managers.
The term "hedge" in hedge funds refers to their original purpose, which was to mitigate or hedge against market risks by employing strategies that aim to generate returns regardless of market conditions. However, modern hedge funds have evolved to encompass a broader range of investment strategies beyond hedging.Check more
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