2011年10月1日 星期六

Hedge Fund | Introduction To Hedge Fund

Although there is no universally accepted definition of hedge funds run, the term has evolved over time to include a wide variety of investment strategies based on skills with a wide range of risk and return objectives. The common element of these strategies is the use of investment management skills and the risk of seeking positive returns regardless of market direction.

Hedge funds are an exciting innovation in the range of professionally managed investment vehicles that have led to sophisticated investment strategies and a new sense of excitement to the investment community. They can serve as a risk management tool for investors, providing valuable portfolio diversification. You could define a mutual fund as a fund of information for reasons of distance hedges all or most of the sources of risk unrelated to the relevant pricing information for speculation.

Hedge funds use a wide variety of investment styles and strategies. Even among hedge fund that intends to use the same investment strategy or investment within the same asset class, there is a wide range of investment activities, performance and risk levels. Because the investment activities of hedge funds are so diverse, hedge funds assigned to a particular investment category are less likely to show the similarity of the more traditional investment vehicles such as registered investment companies.

Strategies can be designed to be neutral on the market (very low correlation with general market) or directional (a "bet" in anticipation of a specific market movements). The selection process may be purely systematic (based on computer models) or discretionary (ultimately, on the basis of a person). A hedge fund may pursue several strategies at the same time, internally allocating its assets proportionately through different strategies.

Hedge funds are often classified according to investment style, including the following categories: relative value, event, funds from venture capital, global asset allocators and short selling. Within each style category, funds are classified according to the underlying markets traded. For example, within the classification of value in relation to style, there are a number of sub-groups, including equity market neutral arbitrage, fixed income, convertible arbitrage, credit arbitrage and statistical arbitrage.

Various hedging opportunities return funds are derived from the expanding universe of securities available for trading and strategies that can be used. Funds can access both financial and nonfinancial (commodity) markets and can take a long time, spread to short and option positions in any of these markets. Expanding the pool of investment opportunities results in providing diversification benefits of a portfolio that can not be reproduced through traditional values, bonds and investment strategies in real estate.

For alternative investments such as hedge funds, to grow as an investment alternative, individuals need to increase their knowledge and comfort level regarding their use in investment portfolios. The logical extension of using investment managers with specialized knowledge of traditional markets to obtain maximum return / risk trade-offs is to add specialized managers who can get the unique benefits of market conditions and value types is generally not available for managers traditional asset, ie hedge funds. In addition, investors should compare the unique benefits available to each of the styles of hedge funds to ensure that the particular style does not duplicate existing investment opportunities.

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