Some Basic Details About Hedge Funds - Alliance Capital Management
KNOWING HEDGE FUNDS To best understand a hedge fund, and also the way the hedge fund functions, a great starting point includes the expression itself ‘hedging’. Whenever someone hedges, they are wanting to decrease the degree of risk which they are exposed to, which is on point for this particular type of investment. A hedge funds objective is to present a solid return on investment while decreasing the minimizing risk. A vital difference this strategy provides, in comparison to investment or unit trusts, is that it may offer a yield regardless of which direction the market moves. Other investments will often just offer a yield when stocks are climbing or the current market is moving upward, but a hedge fund could offer a return if the sector is moving in either direction. Given that risk is an essential component of investment, it's not possible to locate an investment with no risk whatsoever, but a savvy hedge fund manager will have the ability to produce a su