Myths and realities of hedge funds
Understand the strategy and appreciate the risks of your investment because there are always trade-offs to consider
DESPITE all the articles written about hedge funds, most investors may still struggle to define hedge funds and have difficulty determining whether they are appropriate for their portfolio. We would like to tackle popular misconceptions and offer investors practical guidance in evaluating an investment in hedge funds.
In reality, there is no standard definition of "hedge funds". The legal and regulatory framework of hedge funds grants managers the freedom to engage in various investment strategies across asset classes while utilising a range of investment tools, including shorting and leverage.
The dynamic nature of hedge funds represents a substantial competitive advantage relative to more constrained investment vehicles such as mutual funds, but it is also the source of investor confusion and potential risk.
Share with us your feedback on BT's products and services
