Why invest in hedge funds?
Hedge Fund: a definition Broadly speaking, a hedge fund is any type of investment company or private partnership that uses the instruments and techniques such as derivatives (options, futures, swaps, etc.), financial leverage and short selling.
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The added-value of hedge funds Hedge funds can serve an important and valuable role in a well-diversified portfolio, especially since hedge funds reduce market risk by achieving positive returns during market declines. In fact, they aim to achieve risk-adjusted absolute returns regardless of the market environment, rather than simply tracking or attempting to outperform a classic benchmark. In addition, hedge fund managers invest part or all of their own assets in their funds and hence bear the same risks as their clients.
The more an investor understands hedge funds and how they work, the more he can set aside myths and misconceptions and capitalise on the advantages that hedge funds offer. |
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Myths and realities The low degree of transparency of several hedge funds may be the origin of many false conceptions, many of which are still very much alive. We have drawn up a list of some of the most frequent myths and tried to explain why we hold them to be misconceptions. |
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