August 28, 2006

Key Hedge Funds Strategies

Hedge fund strategies vary on several counts. Most investors hedge against market downturns. The primary aim of most hedge funds is to reduce volatility and risk while attempting to preserve capital and deliver positive returns under all market conditions. The popular misconception is that all hedge funds are volatile and they use global macro strategies and place large directional bets on stocks, currencies, bonds, commodities or gold. However, this is far from truth. In reality, less than 5% of hedge funds are global macro funds. Most hedge funds use derivatives only for hedging or don't use them at all. My previous post titled "Facts About Hedge Funds" provides important information about hedge funds.

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