Ads
November 24, 2005
Hedge Funds Score over Conventional Funds
It is interesting to note that most mutual funds, the preferred vehicle of investment, cannot take short positions or use put options. However, Hedge funds, on the other hand, can do this and more. Hedge funds not only have the flexibility to be defensive but it can also be quite responsive to the market and drive strong returns.
The reason is quite clear and evident. Hedge funds as a class of investments aren’t limited to a single category of assets such as stocks, while, conventional funds such as mutual funds are. This essentially means that within the classification of hedge funds there are a wide range of funds with varied strategies and styles.
There are some hedge fund managers who invest in asset classes such as currencies or distressed securities and in one or more regions throughout the world. While, there are those funds that utilize return-enhancing tools such as leverage, derivatives, arbitrage, and highly concentrated positions that are generally beyond the reach of mutual funds.
--
Did you enjoy this post?
Comments
Post a comment
« Hedge Funds Going Mainstream | Main | Pension Funds Investing Heavily in Hedge Funds »
Syndicate
Comments