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What exactly is a hedge fund and how is it different from a mutual fund?

Different, Exactly, From, fund, hedge, mutual
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Print article This entry was posted by admin on April 7, 2011 at 4:54 am, and is filed under Stock Trading. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site.
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  • Comments (3)
  • #1 written by jeff410
    about 1 year ago
    Quote

    Hedge funds are private investment funds with a certain criteria to accept investors. They are unregulated and limited in their number of investors, unlike mutual funds that are regulated by the SEC and virtually unlimited in the number of investors they accept. Although mutual funds do close to new investors at times. Mutual funds invest in stocks and bonds. Hedge funds invest in every part of the financial markets. stocks, bonds, commodities, currencies, futures and other things. And they can take long and short positions in any investment. and therefore make money when the market drops, and create complex hedging strategies. But they also use large degrees of leverage, with borrowed money, which create a great deal of risk. Mutual funds seek relative returns. Returns relative to an index such as the S&P 500. They seek to do better than the index, but that doesnt mean a positive return. Hedge funds seek absolute returns, positive returns no matter what the market does through shorting and complex strategies of different types of investments which are unavailable to mutual funds.. Hedge funds typically charge a 2 percent management fee, and take 20 percent of the profits

  • #2 written by elemfin
    about 1 year ago
    Quote

    To add to what has been said, the average person cannot invest with a hedge fund. I’m sure they are out there in another form but hedge funds are normally for big investors. Retail, or part time investors, don’t have access to these funds.

  • #3 written by Schwab Money and More Panel
    about 1 year ago
    Quote

    Many are surprised when they hear hedge funds and mutual funds have been around a very long time. On the surface, hedge funds will pool money from individuals and institutions to invest for a fee, just like mutual funds. They will have a manager or team approach to managing money, again, just like mutual funds. However, there are some key differences: Less regulation – Hedge funds are not as heavily regulated as mutual funds which means they can be riskier than traditional mutual funds. Less transparency – Hedge funds are not obligated to provide public disclosure, so it can be very difficult to assess holdings or diversification of a portfolio. Less liquidity – Hedge funds may set specific open periods to liquidate shares. Most mutual funds can be liquidated on relatively short notice or on a daily basis. Use of Sophisticated or Speculative Techniques – Ok, mutual funds can do this too – to a degree. However, generally, hedge funds, can carry a higher degree of volatility depending on strategies employed. Last, since hedge funds usually charge management AND performance fees, they will usually be more costly to own than most mutual funds available to you.

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How do i find an investment club in georgetown or DC? I am a talented investor and want to starta hedge fund.

about 11 months ago - 1 comment

Hedge fund vs Investment partnership?

about 11 months ago - 1 comment

Is there a difference between the two? In addition: http://www.bivio.com/index.html Is opening an account here the same as opening a hedge fund or an investment partnership? I know Warren Buffett began before Berkshire Hathaway the Buffett Partnership, is what is shown on this website similar?

where I can find co. RCA involve in hedge fund and stock investments?

about 11 months ago - 1 comment

Company is us based

is “hedge fund” a recognized term in securities legislations?

about 11 months ago - 2 comments

or is it an unofficial, loosely defined term to describe entities with certain characteristics?

Where can I learn about hedge funds?

about 11 months ago - 3 comments

Every website about hedge funds seems to want to sell me a fund or tell me how great their company is. Is there a site that explains hedge funds without a sales pitch?

What is the name of Edward Lampert’s hedge fund?

about 11 months ago - 1 comment

and who do I contact for information about the fund.

What’s a good major that could help me one day head a hedge/mutual fund?

about 11 months ago - 2 comments

Is it a Finance major? Or an MBA with a focus on Finance? Or something else?

Hedge Fund Manager David Tepper accused of insider trading. How much jail time do you think he’ll get?

about 11 months ago - 1 comment

hedge fund what is it?

about 11 months ago - 1 comment

I read with all this bail-out stuff going on that hedge funds could responsible what is a hedge fund and how does it effect the economy?

Why do hedge fund managers take money from people and offer high interest rates rather than taking a bank loan

about 11 months ago - 3 comments

I mean banks charge interest at maximum 15% per annum. But some of these guys promise returns of 25% and more! So why do they lose out that 10%? Why not simply borrow as much as is required from the bank?

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