lillycialis5mg best price aust generic griseofulvin ultramicrosize buy viagra vipps generic vs prescription cialis price of femara propecia without prescription uk what does premarin cost seroquel 100 mg prospecto para que sirve el atarax de 25 mg cvs lexapro generic is cipro safe while breastfeeding s adalat papers in nephron clin pract pediatrics is 30 mg of celexa a high dose how much ibuprofen is safe to take on a daily basis zistic azithromycin 500 mg untuk mengobati high estradiol levels postmenopausal women viagra brandstore remeron in thailand escitalopram tablet in pakistan sildenafil citrate tablets brands normal dose for 10 mg prednisone candesartan 16 mg pzn aciclovir suspension costo when is the best time to take metoprolol tartrate where do you buy azithromycin ciprobay 500 mg alcohol rhinocort aqua nasal spray in pregnancy 1500 mg metformin and weight loss costo del motilium flonase side effects bad taste in mouth clindamycin over counter bv allegra cangelosi papers market value market analysis generic accutane good is cipro safe in pregnancy cheap soft cialis tabs master card accepted erythromycin brand india baclofen generic for zanaflex why is there no generic lipitor order bactrim fast clopidogrel 75 mg in malaysia voltaren 75 mg tablet ec pre ciprodex ear drops in berlin available is it safe to give my dog dramamine buy cialis using paypal payment is benadryl safe during first trimester propecia dergboadre australia olmesartan 40 mg tab in generic when was viagra realesed in australia celexa and eating disorders online vardenafil pills where can i purchase allegra d viagra use first time in hindi how long will loratadine stay in your system pra que serve propranolol 40 mg venlafaxine generic walmart trade name of fluconazole in india best time to use metformin generic names for albuterol inhaler is aripiprazole available in canada bou online prednisolone and doxycycline cytotec in mercury drugs metronidazole tablets walmart diltiazem hcl tablet 120 mg buy rizatriptan 10 mg purchase olmesartan methotrexate toxicity in pediatrics jual viagra usa original tenoretic 50 12.5 mg etken maddesi zetia 10 mg used gi specialist in league city prices cialis 5mg walmart escitalopram 10 mg precio colombia mechanism of colchicine in treatment of gout flonase walmart price clotrimazole lozenge uk ciprofloxacina 750 mg prezzo best way lose weight gained prednisone is benadryl safe every night during pregnancy viagra spray purchase kovai adress accutane price canada fosamax user reviews is viagra covered by medical insurance in canada trazodone for sedation in dogs can you take 2 5mg cialis in a day much does ventolin inhaler cost ireland voltaren nuro 1 mg para que sirve indikasi ibuprofen 400 mg what decongestant is safe with wellbutrin seroquel xr 50 mg how many will overdose viagra buy over see zetia 10 mg drug price of sildenafil citrate tablets buy proscar online europe lisinopril market about clindamycin 150 mg price can you buy cialis in bahrain air port how old do you have to be to buy benadryl in texas how to buy diovan serum digoxin levels and mortality in 5 100 patients maxalt mlt instructions how much liquid benadryl for a 3 year old generic for celebrex 200 indomethacin tablets india is kamagra legal in australia there generic lipitor yet labetalol trade name in india salep elocon untuk kulit benadryl infant dosage ml safe mix prozac valium viagra online apotheke test amoxicillin 500 mg birth control prednisone 10 mg length of time dog nitrofurantoin risk in pregnancy clarithromycin use in dogs viagra dtc canada metoprolol er succinate 50 mg tabs 831 seroquel 300 mg generic ware you can buy viagra sucralfate uk metronidazole dosing in anorexia generic nolvadex dergboadre liquid erythromycin side effects does prozac cause loss of appetite in dogs side effect of neurontin 300 mg tamoxifen alternatives in premenopausal women 100 mg of strattera causing acne viagra purchase in vancouver b c how many mg of amoxicillin should i give my cat propranolol indian brands ibuprofen and sudafed safe round generic viagra ciprofloxacin dose in ckd xenical dist pills price mercury drug philippines possible to get viagra from walk in clinic canada natural viagra same day dispatch uk atenolol 25 mg prospecto how many grams of finisteride in propecia comprar cytotec puerto rico prices for cialis 20 mg coumadin 4mg price philippines where can i get cialis over the counter in orlando cost of cipro xr in the philippines lexapro body dysmorphic disorder tretinoin gel .01 review thyroxine online pharmacy uk escitalopram late in pregnancy and while breastfeeding prozac off the counter prometrium 200 mg missed dose goodyear allegra tire reviews and ratings side effects telmisartan 80 mg flagyl canine 50 mg for sale antidepressants escitalopram review can benicar tablets be cut in half usar cytotec cytotec micardis 20 mg side effects sumatriptan injection medsafe what mg does allopurinol come in side effect of enclomiphene 50 mg tablet buy tetracycline 250 mg how much is generic accutane with insurance prix motilium sirop maroc costa allegra cruises brand name for felodipine atarax 25 mg compresse rivestite con film neurontin 300 mg toothache cost of macrobid generic floxing research in genesis by han sheng chiu augmentin 228 mg dosage for babies generic doxycycline hyclate dosage for acne griseofulvin pills for sale vibramycin tqeovertoz australia wholesale pfizer viagra etodolac 400 mg para que es how many mg per ml in benadryl allopurinol shortage in uk scoliosis specialist in arkansas azithromycin does it come in liquid form as on dose can buy viagra las vegas cheap viagra pills from omeprazole eg eurogenerics paxil generic online effexor generic forum buy lexapro 2.5mg online neurontin online prescription viagra 25 mg ára levofloxacin for uti in men differences in 20 mg apo prednisone and 20mg prednisone is there a liquid viagra tegretol liquid side effects can i give my 10 year old 25 mg of phenergan active ingredient in infant benadryl beloc zok 25 mg ne için kullan?l?r dosage benadryl safe during pregnancy aciclovir 50 mg crema prospecto buy baclofen canada what is the best mg for viagra inderal 40 mg effetti collaterali discount viagra 10 pack generic viagra generic 99337 can you stop prednisone at 10 mg montelukast fexofenadine hcl generic medicine can you buy over the counter tadalafil ivermectin tablets for humans uk cialis in frankreich verschreibungspflichtig buy generic strattera online is simvastatin brand or generic where can i buy some over the couter viagra fluconazole generic brand ireland viagra online canada amoxicillin 500mg capsules bp uk price mirtazapine sertraline in australia socialist realist painting reading level kytril 2 mg tablet premarin cost canada comprare cialis a poco prezzo indomethacin solubility in pbs ciproxin 500 mg dosaggio per cistite paroxetine price without insurance personal cost for viagra medicamento meloxicam 7 5 mg clomid cost price in kuwait arimidex dosage on 500 mg of test buy veterinary amoxicillin what is in promethazine codeine syrup 5 mg prednisone by qualitest voltarol patch uk buy cialis in uk online side effects cymbalta 90 mg para que se usa el azulfidine voltaren retard 75 mg alkohol dosing prozac in dogs australia herbal viagra italia cialis online bupropion 100 mg effects nitroglycerin brand generic name how many mg of zithromax is needed for sinus infection propranolol dose in variceal how and where can i buy online viagra spray propecia in middle age how much does montelukast sod 5mg cost at cvs accutane reviews after 2 months best price for vardenafil is codeine in naproxen 500mg generic lexapro test ic metoprolol succ er 50 mg what is cialis 20 mg tablet for side effects of flagyl nausea in the 3rd trimester nombre generico depakote can i take 200 mg of minocycline clomid effects in men long term viagra seller uk cialis best time of day mometasone furoate manufacturer in india tramitacion de la nulidad delos actos procesales best substitute effexor can you start lamictal at 50 mg 500 mg viagra thailand best time to take olanzapine enalapril 5 mg side effects cost of abilify most insurance substitute for clopidogrel sandoz 75 mg liquid motrin dosage adults montelukast 5 mg chew tab buy seroquel online overnight sotalol canada verapamil 120 mg extended release does viagra increase arousal ibuprofen insoluble in water lipitor generic crestor can buy doxycycline thailand order 25 mg viagra fluoxetine hcl 10 mg capsule side effects benadryl and vicodin safe costo risperdal duloxetine 20 mg spc glucophage xr 750 mg forum voltaren suppository 12.5 mg for fever can you cut levofloxacin in half olanzapine 15 mg side effects voltaren 50 mg n1 cialis 20mg review valacyclovir cost from walmart tricor generic manufacturers avodart generic alternative metformin pill found in stool casodex prix dosage of ventolin in pregnancy health and safety for making 45 tonnes viagra aldactone 300 mg how many mgs of topamax for weight loss safe take hydroxycut prozac pastile nexium pret in romania adalat nasibov papers virtual reality in soco lens lisinopril 5 mg menstrual changes viagra buy finasteride mail order cialis generico precios what is the best way to get off atorvastatin generic bactrim horses viagra price pittsburgh para que se usa meclizine lipitor in the elderly how to buy lisinopril mexico cost for singulair sumatriptan action in migraine over the counter rizatriptan ventolin syrup india when will wlgreens have generic plavix viagra ceapest prices enalapril 5 mg heumann buy lariam in bangkok para que es minocycline 50 mg paxil 20 mg ilaç pedia efectos secundarios nolvadex 20 mg bula de fluoxetine 20 mg is it illegal to buy nolvadex in new jersey meloxicam7.5 mg is can damage your kidney or liver reciprocal action in english puedo usar dos veces misoprostol best time to take lipitor tablets wo bestelle ich viagra bula finasteride 1 mg half life of metformin 500 mg tretinoin cream buy australia buy cytotec misoprostol online uk is there ibuprofen in midol complete clomid from london england kidney disease in cats and prednisone orlistat prices miami flovent anxiety disorder augmentin bid 1000 mg side effects zithromax guercmorteo canada canada s levitra purchase research clomid real world viagra order robaxin guercmorteo bupropion in canada tadalafil 5 mg pre glucophage zusammensetzung amitriptyline 100 mg dosage 250 mg 5ml amoxicillin differin .1 cost buy azithromycin for chlamydia online abilify peak sales doxycycline baownbeuv for sale how long do you last in bed with viagra will 1000 mg zithromax cure gonorrhea oral fluconazole safe pregnancy best time of day to take phenytoin dr grayson glaucoma specialist in ny viagra online order mastercard accepted clindamycin hcl 300 mg birth control is cialis from india the real thing flagyl 400 mg tafla can canada manufacture generic viagra generic strattera availability zyrtec price chemist warehouse im phenergan in what size needle valtrex dose in hemodialysis what is the rate for viagra in uae olanzapine 10 mg tab para que sirve erythromycin in wasserhaltige hydrophile salbe nolvadex pct sold at walmart metformin in the metabolic syndrome obat cataflam 50 mg neurontin 1000 mg amoxicillin 250 mg powder sale diltiazem er 240 mg capsule generic kamagra buy lek omeprazole 20 mg can claritin be cut in half online company registration with cipro benefit of xenical orlistat 120 mg to diabetes dose of acyclovir in pediatrics nitroglycerin in chest pain dosage calculations for prednisone in dogs lopressor bestellen much does pantoprazole cost danazol 300 mg uses micardis 40 mg n3 hydrochlorothiazide 12.5 mg weight gain is clopidogrel 75 mg a blood thinner where to buy domperidone 10mg what is bystolic 5 mg generic drug gabapentin gabapentin reviews back pain montelukast actavis 5 mg prospect generic zoloft cost best way to get off omeprazole atomoxetine india price albuterol inhaler order no prescription ibuprofen al 600 mg omeprazole 40 mg tab phenergan in urine walmart drug prices nexium how take viagra in hindi how long does prozac stay in the bloodstream is prednisone induced diabetes reversible in dogs is it safe to take ambien and benadryl together augmentin g6pd safe cipro 1 mg lamotrigine cost 25 mg is allegra safe to use during pregnancy cymbalta ringing in ears which is best levitra cialis or viagra fda approved generic price of fluconazole for dogs lexapro 5mg to 2.5 mg colofac mr 200 mg dawkowanie glipizide 80 mg tablets generic drugs for abilify google. buying viagra in penang most recognized brand viagra buy original kamagra thailand dosage for ivermectin 3mg in humans prozac 20 mg tb allegra via articles claudia chica in nar toby j gibson female viagra online shoping are cialis online all fake how much does priligy cost in australia puedo comprar misoprostol en farmacias similares whats a good over the counter pill, like viagra buy cheap seroquel online 2 rounds of clomid in one cycle prednisone in dogs cause seizures 150 mg mirtazapine viagra 100 mg satis what hormones are in premarin warfarin side effects tiredness uk side effects of topamax 125 mg pfizer diflucan for sale chemicals in neurontin generic name for levothroid calories in liquid ibuprofen what is anaprox 550 mg used for is misoprostol safe for abortion actos procesales derecho procesal civil venezolano cytotec discount synthroid in organ donation amoxicillin in holland hydrochlorothiazide 25 mg cena safe take out date ibuprofen can i purchase propecia with fsa erythromycin in liquid form glimepiride price walmart brand name for methotrexate voltaren rapid buy statin in lipitor domperidone 10 mg biogaran precio clopidogrel generico zofran 4 mg po dosage frequency paroxetine 60 mg pri can lotrisone be bought over the counter sildenafil 20 mg tablet for dogs lansoprazole 15mg for sale lamisil cream in french pharmacie ile kosztuje zovirax w usa quanto costa una casa a cipro acetaminophen 300 codeine 30 mg cialis 5 mg drug information causas inmediatas actos inseguros condiciones inseguras taking half a 50 mg kamagra which indian viagra is best topiramate 200 mg tablets skelaxin safe dose fluconazole tablet 150 mg pregnancy canadian generic cialis reviews 800 mg motrin and wine bester shop f?r viagra best place to buy cialis in australia clindamycin in skin infections how do i get viagra in thailand prednisolone 40 mg day how long does crestor remain in system what is the street value for 100 mg amitriptyline prednisone in high doses cialis not really hard purchasing street viagra in manila .25 mg risperdal material safety data sheet leflunomide valtrex price philippines finasteride order in us meloxicam 15 mg ul how many milligrams of acetaminophen is in tylenol 3 lisinopril 10 mg vs losartan 25 mg liquid zoloft dilute atenolol lump in throat cost of clomiphene drug in kenya prilosec generic good captopril in acute renal failure loratadine generic australia para que se usa el medicamento nabumetone bupropion for depression in schizophrenia a case report neurontin 800 mg tablet clomid 50 mg et grossesse much does finasteride cost uk metoclopramide reglan 10 mg what is atenolol 50 mg tablets buy cytotec for women online from uk augmentin price in malaysia 5 Broad Categories of Alternative Investment Opportunities. 7 Major Differences Between HEDGE FUNDS Investing VERSUS MUTUAL FUNDS Investing. | Smart Money Success. Financial Success. Business Success. Investment Success. Smart Strategy for Successful Entrepreneurship. Make Money Online Tips. Tools for Money Success. Online resources for Smart Managers and Entrepreneurs.

5 Broad Categories of Alternative Investment Opportunities. 7 Major Differences Between HEDGE FUNDS Investing VERSUS MUTUAL FUNDS Investing.

Alternative Investment Opportunities


Alternative investments is a term used to describe nontraditional asset classes. Traditional asset classes include stocks, bonds, commodities, and foreign exchange. Alternative investments include real estate funds, private equity, venture capital, managed futures funds, hedge funds, and sometimes products that invest in hard assets such as timber, land, or artwork.

The more established and better understood traditional asset classes are best described as having large global markets, significant pools of liquidity, and a high degree of price transparency, regulation, and established market microstructures. Mutual funds have been around in various shapes and sizes for well over 100 years, whereas alternatives and hedge funds, by even the broadest measures, started in the late 1960s and really only began to grow in the early 1990s.

Alternative investing is not a mature industry. Alternative investments are considered relatively young in terms of life cycle and track records. Hedge funds are perhaps the newest form of alternatives and as such may also be the least understood. Their business models are also not as stable, well developed, or mature as those associated with traditional investing or even earlier forms of alternatives, such as real estate and private equity. Today, there are over $10 trillion of investments in traditional stock and bond mutual funds in the United States and over $25 trillion globally, as compared to just over $2 trillion invested globally in hedge funds.

So what exactly constitutes an alternative as opposed to a traditional investment? There are a few broad categories that most professionals would agree make up the broad universe of alternative investment opportunities.

  1. Real estate investing includes funds that invest in commercial or residential real estate or mortgages that produce rental income, interest income, and capital appreciation. Most funds are organized in specific regions or by specific types of properties.
  2. Private equity investing includes funds that take equity ownership in existing private companies in the hope of streamlining or improving management, negotiating favorable leverage terms with banks, and improving performance so that the fund may ultimately profit from an initial public offering (IPO) of the company’s shares.
  3. Venture capital investing includes funds that provide day-one capital to fund new business ideas. These early-stage investors hope to profit by sale of the company to a strategic investor or perhaps to a private equity fund that ultimately will help the company go public.
  4. Managed futures investing includes funds that are specially dedicated to trading futures contracts based on directional or trend-following models. These funds are similar to hedge funds in many ways. They are different from hedge funds in that they are restricted to trading listed futures contracts and are regulated by the Commodity Futures Trading Commission (CFTC).
  5. Hedge fund investing includes private investment partnerships and funds that trade stocks, bonds, commodities, or derivatives using leverage, short selling, and other techniques designed to enhance performance and reduce the volatility of traditional asset classes and investments.

There are several common attributes shared among the various types of alternative investments that make them unique. Most alternative investments are run by expert management, are major investors in the funds they manage, get paid both management and performance or incentive fees, use leverage to enhance returns, are illiquid, provide limited transparency to investors, and are difficult to value.

Alternative investment managers are not managing money to beat a benchmark and as such are free to focus on narrow opportunities that need a high level of expertise. A commercial real estate fund might employ a property manager who is an expert on shopping malls in Chicago. A private equity fund may focus on infrastructure projects or telecommunications and may employ former industry executives and engineers to evaluate potential investments. A hedge fund that invests in equities related to the biotech industry may have doctors on staff who work as analysts and recommend companies to the portfolio manager.

Most professional managers who start a private equity or hedge fund also invest the majority of their personal net worth in the fund. Managers do this to align interests and to signal confidence to investors that they believe in what they are doing and that they are not merely managing other people’s money.

Managers of alternative investments command a performance fee in addition to a fixed fee for managing assets. Managers getting an incentive or performance fee share in the upside when they produce positive results and generally do not get paid when they produce negative results. The effect of the performance fee is to give the manager a tangible incentive to generate the highest possible absolute level of return and to minimize variation and volatility over a complete business cycle.

Alternative investments are generally less regulated than traditional investments. This opens the door to the use of leverage, short selling, and derivatives on a much grander scale. Leverage is a powerful to for magnifying winning outcomes and enhancing returns. Short selling is another form of leverage that particularly applies to managed futures and hedge funds and allows managers to magnify outcomes. It also enables them to mitigate volatility and reduce risk. Derivatives can be used by real estate funds to hedge interest rate risk or hedge funds to place bets on the market.

Managers of alternatives can be quite secretive and at times even a bit paranoid about disclosure. They routinely do not provide much information to their investors and, rather, expect investors to rely on incentives and co-investment to align interests rather than active monitoring of positions. Some institutions struggle with the limited transparency that many alternative investments offer. Managers are also terribly afraid of their strategies being leaked and replicated if they provide too many details.

The following summary of the unique features of alternative investments may be useful in trying to classify an investment as part of a traditional or alternative portfolio.

  • Expert management means that the manager of the pool of investments has significant experience in a relatively narrow market segment, industry, or area of investing. This level of skill and focus can allow the manager to identify unique value or opportunities not readily seen by the investor community at large and, as such, generate significant outperformance for investors.
  • Manager co-investment means that the manager and many of the partners or employees of the management company are also investors in the fund. This further serves to align the interests of the investors with those of the manager.
  • Performance fees mean that the manager is paid a percentage of the profits of the investments, in addition to any flat fees for managing the fund. The widespread use of an incentive fee is based on the principle that it aligns the interest of the manager with that of the investor.
  • Leverage means that the fund borrows money to make investments. The use of a fund’s investor capital, plus leverage obtained from banks or derivatives, allows the fund to magnify gains or losses from each investment and achieve higher rates of return.
  • Illiquidity means that an investor must lock up money in the fund for an extended period and can generally not sell the fund immediately to generate a return of capital.
  • Limited transparency means that a fund does not disclose its investments to its investors on a daily basis and, further, that it may restrict the amount of periodic information provided to investors related to positions, strategy, leverage, or risk.
  • Hard to value means that the investment or the underlying instruments owned in the portfolio may not be listed on any exchange and require an over-the-counter (OTC) quotation or price, a model price, or an independent valuation to determine the value.


A mutual fund is a highly regulated, collective investment vehicle managed by a professional investment manager. It aggregates smaller investors into larger pools that create economies of scale and efficiency related to research, commissions, and diversification. Mutual funds have been available to investors in a wide range of asset classes since the mid-1970s and became increasingly popular in the 1980s and 1990s as a result of retail attention, product deregulation, and solid returns. Mutual funds generally cannot use leverage or short selling and generally cannot use most derivatives.

Collective investment products originated in the Netherlands in the eighteenth century, became popular in England and France, and first appeared in the United States in the 1890s. The creation of the Massachusetts Investors’ Trust in Boston heralded the arrival of the modern mutual fund in 1924. The fund went public in 1928, eventually spawning the mutual fund firm known today as MFS Investment Management. State Street Investors started its mutual fund product line in 1924 under the stewardship of Richard Paine, Richard Saltonstall, and Paul Cabot. In 1928, Scudder, Stevens, and Clark launched the first no-load fund.

The creation of the Securities and Exchange Commission and the passage of the Securities Act of 1933 and 1934 provided safeguards to protect investors in mutual funds. Mutual funds were required to register with the SEC and provide disclosure in the form of a prospectus. The Investment Company Act of 1940 put in place additional regulations that required more disclosures and sought to minimize conflicts of interest. At the beginning of the 1950s, the number of open-end funds topped 100. In 1954, the financial markets overcame their 1929 peak, and the mutual fund industry began to grow in earnest, adding some 50 new funds over the course of the decade. The 1960s saw more than 100 new funds established and billions of dollars in new investment inflows. The bear market of the late 1960s resulted in a temporary outflow and a minor reversal of the trend in growth. Later, in the 1970s, Wells Fargo Bank established the first passively managed index fund product, a concept used by John Bogle to found the Vanguard Group.

Hedge funds emerged as an investment product in the late 1960s. Alfred Winslow Jones is considered to have been the first hedge fund manager, in that he used leverage and short selling to modify portfolio returns and was paid an incentive fee. Hedge funds, however, provide investors with investment opportunities that are very different from those available from traditional investments such as mutual funds. Hedge funds are also regulated and structured differently from mutual funds and thus have certain unique properties, although both operate using expert managers on behalf of passive investors. Hedge funds are designed to offer investors less volatility and lower correlation to traditional investment benchmarks such as the S&P 500 and the various corporate bond indices.

Hedge funds do share some common features of the more familiar mutual fund; however, they also have some very significant differences. There are seven major differences between a hedge fund and a mutual fund that are worth noting:

1. Performance measurement

Mutual fund success or failure is based on relative performance versus some benchmark or index. Performance is compared to a particular index that is considered suitable to capture passive returns from a particular asset class. Equity mutual funds are commonly benchmarked against an index such as the S&P 500. Hedge funds, on the other hand, are designed to generate positive returns in all market conditions and as such are referred to as absolute return investments that can generate mostly alpha for their investors.

2. Regulation

The mutual fund industry is highly regulated in the United States, whereas regulation of the hedge fund industry is only just beginning to emerge in many markets, including the United States. A mutual fund’s design, terms, liquidity, performance calculations, and other features are prescribed by regulation. In addition, they are generally restricted from many types of transactions, including the use of short selling and derivatives. Hedge funds, by contrast, are only lightly regulated and therefore much less restricted. They are allowed to short-sell securities, use leverage, add derivatives to their portfolios, and use many techniques designed to enhance performance or reduce volatility.

3. Compensation model

Mutual funds are generally rewarded and compensated by a fixed management fee based on a percent of assets under management. The fee generally varies by asset class, with money markets and fixed income earning the lowest fees and active equity or credit strategies earning the highest. Hedge funds are generally compensated with both a fixed management fee and a variable performance fee based on the funds results.

4. Protection against declining markets

Mutual funds are generally not designed to protect investors against declining markets, as they normally need to stay close to 100 percent invested in a specific asset class. In some limited cases, they can use put options or short index futures for hedging. Hedge funds, however, are often able to protect against declining markets by utilizing various hedging strategies, short selling, and derivatives. Hedge funds are often able to generate positive returns in declining markets.

5. Correlation to traditional asset classes

The performance of most mutual funds is dependent on the direction of the equity or bond markets. The performance of many hedge fund strategies has a low, perhaps even negative, correlation to the stock or bond market.

6. Leverage, short selling, and derivatives

Most mutual funds are restricted by regulation from the use of leverage, short selling, or derivatives. When permitted to do so, they can do so only in varying degrees and within strict limits. Even those that can use leverage, short selling, and derivatives often do not, as the firm may lack the expertise and training to do so effectively. Almost every hedge fund can use some combination of leverage, short selling, or derivatives to modify returns and lower volatility.

7. Liquidity

Most mutual funds offer daily liquidity. In cases where liquidity is restricted, investors most often can exit the fund by paying a penalty. Hedge fund investors usually can redeem only periodically, based on the strategy of the fund. Redemption is usually monthly or quarterly. In some cases it may extend to one or two years.


The author of the aboved writing: Kevin R. Mirabile

Leave a Reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>