HEDGE FUNDS

A HEDGE FUND   is an investment vehicle that pursues absolute returns on its underlying investments which includes Stocks, Bonds, Commodities, Currencies, Derivatives, etc. That applying non-traditional portfolio management techniques such shorting, leverage and so on.

So we can say that to hedge means to manage risk. For example, money manager make an investment that one is speculative and also makes an allocation that balances any negative performance from his speculative position, this is the time of hedging position.

So the primary aim of the most hedge funds is to reduce volatility and risk. That why, we have to be attempting to preserve capital and deliver the positive returns under all market conditions.

Quality of Hedge Funds:  is to utilised a variety of financial instruments to reduce the risk and enhance the returns as well as those which are flexible in their investment options. Funds that have an objective as consistency of returns and capital preservation rather than magnitude of returns.

Who can invests in a hedge funds ?

Simply, if you cannot afford to lose the money you invest then you should not be looking at hedge funds as a viable investment route. Traditionally Pension Funds, Endowments, Insurance Companies, Private Banks And High Net Worth Individuals And Families Invest In Hedge Funds To Minimise Overall Portfolio.