What are Hedge Funds Important Facts of Hedge Fund Industry

What are Hedge Funds Learn some Important Facts of Hedge Fund Industry

Everyone want to know about “What are Hedge Funds Important Facts of Hedge Fund Industry“. So, the answer is A hedge fund is an alternative investment vehicle available only to sophisticated investors.

such as institutions and individuals with significant assets.Like mutual funds, hedge funds are pools of underlying securities.

Also like mutual funds, they can invest in many types of securities.but there is differences between these two investment vehicles.

First is, hedge funds are not currently regulated by the U.S. Securities and Exchange Commission (SEC).
Second difference is , as a result of being relatively unregulated, hedge funds can invest in a wider range of securities than mutual funds can.

what are hedge funds – facts of hedge fund industry [howpk.com]

Now we discuss about Important Facts of Hedge Fund Industry.

1. Estimated to be a $1 trillion industry and growing at about 20% per year with approximately 8350 active hedge funds.
2. Includes a variety of investment strategies, some of which use leverage and derivatives while others are more conservative and employ little or no leverage.
3. Most hedge funds are highly specialized, relying on the specific expertise of the manager or management team.
4. Performance of many hedge fund strategies, particularly relative value strategies, is not dependent on the direction of the bond or equity markets.
5. Many hedge fund strategies, particularly arbitrage strategies, are limited as to how much capital they can successfully employ before returns diminish. As a result, many successful hedge fund managers limit the amount of capital they will accept.
6. Hedge fund managers are generally highly professional, disciplined and diligent.
7. Their returns over a sustained period of time have outperformed standard equity and bond indexes with less volatility and less risk of loss than equities.
8. Beyond the averages, there are some truly outstanding performers.
9. Investing in hedge funds tends to be favored by more sophisticated investors, including many Swiss and other private banks, that have lived through, and understand the consequences of, major stock market corrections.
10. An increasing number of endowments and pension funds allocate assets to hedge funds.

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