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Hedge Funds are professionally managed funds that use a variety of financial instruments, such as stocks, bonds, short-term money market and other securities, in order to generate a return on investment. Hedge funds are designed to produce higher returns than comparable investments (i.e. mutual funds) because it is constructed to "hedge" downturns in the market.
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Fast Facts:
- 1949: Alfred Winslow Jones created the first hedge fund
- Hedge fund investors must be accredited, which means they must meet outlined financial criteria
- Hedge funds generally charge a performance fee (the manager's share of positive returns)
- In many states hedge funds are not required to be registered with the SEC
- Participation in a hedge fund is limited and minimum investments are applied
- Hedge funds are not insured by the FDIC
- The hedge fund industry is estimated to be nearly a $1 trillion industry with a 20% annual growth rateMagnum: Facts about the hedge fund industry
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Hedge Funds Questions
Are hedge funds opportunistic or smart? 1 AnswerWell, the answer is both. Sometimes the smart move for an individual investor (Or limited number of wealthy investors) is not the best move for a business or th... read more
What is the difference between an Sovereign Wealth Fund and a Hedge fund? 3 AnswersHedge funds ---------------- The few commonalities of hedge funds are their structure and their payment schemes. In domestic form these funds are typically s... read more
Did hedge funds wrecking havoc with Chrysler? 1 AnswerWhat has wreaked havoc with Chrysler have been unrealistic pension plan agreements, the effects of which have more recently led to a need for chapter 11 restruc... read more
How do Hedge funds profit from Credit Default Swaps? 1 AnswerThe idea of a credit default swap was something like insurance. If you as a business owned bonds or stock in a company and you thought it was likely to fail, yo... read more -
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