Investment Hedge Funds
Hedge fund – is an investment partnership that invests in the most securities and derivative financial instruments. Some of the funds and work in the commodity markets . All depends on the purpose and direction of the funds themselves . Hedge funds have one peculiarity : they are given the chance to earn income and favorable period of the stock market and the unfavorable period .
Since hedge fund – is a private investment partnership , then there is a limit on the terms of individual investors. Their number can not exceed 99 people . And at least 65 people from this number should have a special status of ” accredited .” This gets the status , whose contribution exceeds a certain level . Its level may well be one million dollars. In addition, the investor making the kind of money required to prove that they had not the last .
Offshore hedge fund – is a mutual fund that is a resident of a preferential tax territories. It may be, for example , Bermuda . Such a fund , technology investment , no different from hedge funds. Although , there are to be differences. But they are not always visible . The main difference – the entrance to the partnership, and recovery from, the transparency of the income distribution .
Usually have minimal risks Bills U.S. Federal Reserve . All remaining instruments are considered high risk , and that relate to the income received , and investments themselves .
Currently, hedge funds are pouring more of their traditional instruments . Such funds are good because they have a focus on absolute return . That is, the income will be in any case , regardless of the market situation.
Key success factor – opacity and limited reporting of hedge funds . It sometimes scares investors. The basis of all hedge funds – low efficient market. A factor market failure – not enough information to get some investors on the activities of others.
The term ” hedge funds ” is quite common , including many investment strategies with varying degrees of risk and different behavior in market conditions. It is allowed to combine different strategies with low correlation ( or at all negative) in one fund that has the best balance of risk and return.
There are also index hedge funds – a kind of way to reduce unsystematic risk .
Often the question is how and to what a hedge fund is best to invest in? They have a variety of strategies and risk including . The minimum amount for investment is 10 000 euros. But for citizens of the CIS , this amount increased to 100 000 euros. But if you want to invest smaller amounts , you can use the bank. That is , you need to open an account in a foreign bank and identify him instructions for the purchase of securities from a hedge fund . In this case, the client will need to make only 10 000 or 20 000 euros. Investment period – from 6 years and up to 10 years . And this is taking into account the provision of guarantees that the capital will be saved .
In general , hedge funds do not actually considered risky in terms of investment and provide more attractive for investors. Typically, these hedge funds are considered as conservative , but at the same time are potentially highly profitable financial instruments.