[gnupg-ru] APFinancial - Hedge fund

[paul.kholer paul.kholer]

APFinancial - Hedge fund


  An investment vehicle that somewhat resembles a mutual fund, but with a
number of important differences. If the fund is "off-shore", the fund does
not have to adhere to any SEC regulations (and can only sell to non-U.S.
investors or investment vehicles). These funds employ a number of different
strategies that are not usually found in mutual funds. The term "hedge" can
actually be misleading. The traditional hedge fund is actually hedged. For
example, a fund employing a long-short strategy would try to select the best
securities for purchase and the worst for short sale. The combination of
longs and short provides a natural hedge to market-wide shocks. However,
much more common are funds that are not hedged. There are funds that are
long-biased and short-biased. There are funds that undertake high frequency
futures strategies, sometimes called managed futures. There are funds that
take long-term macroeconomic bets, sometimes called global macro. There are
funds that try to capitalize on merger and acquisitions. Another
distinguishing feature of hedge funds is the way that managers are rewarded.
There are two fees: fixed and variable. The fixed fee is a percentage of
asset under management. The variable or performance fee is a percentage of
the profit of the fund. There are also funds of funds which invest in a
portfolio of hedge funds. Another important difference with hedge funds is
that the minimum required investment is usually quite large and, as a
result, minimizes the participation of retail investors.




Regards, APFinancial
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