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How does a hedge fund differ from a fund of funds?

Updated: 8/18/2019
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A hedge fund is an investment vehicle that can invest in equities, bonds, commodities, currencies, optiones, futures, and non-traded companies, among other instruments. A fund of funds is an investment vehicle that invests in a portfolio of hedge funds (or other funds).

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Q: How does a hedge fund differ from a fund of funds?
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How do mutual fund and hedge fund investments differ?

Mutual funds are only different from hedge funds in that they are purchased completely up front whereas hedge funds are paid for over time.


What is a fund of hedge fund?

It is a fund that invests in a portfolio of hedge funds.


How does hedge fund differs from mutual fund?

Hedge funds and mutual funds are both managed portfolio in which securities are picked by a fund manager. However hedge funds are more aggressively managed as compared to the mutual fund. They can take speculative positions in the derivative securities .Hedge funds also differs from mutual fund in their availability, they are available to only specific investors .There are many investment companies that invest in hedge fund and mutual fund of which Reliance mutual fund is one of the good one.


what does a hedge ufnd analyst do?

A hedge fund analyst in a person who works with hedge funds. Their primary duty is to review the strategies of a hedge fund and then identify the strengths and weaknesses of that fund.


Name different categories of funds?

Some fund categories are: * Equity funds * Debt funds * Hedge funds * Fund of funds etc...


How does a hedge fund differ from a mutual fund?

Hedge funds and mutual funds are both managed portfolios in which the securities are picked by a fund manager. The securities that are picked are the ones that the manager feels will perform well and are grouped into a single portfolio. Portions of these funds are then sold to investors who are allowed to participate in the gains and losses of the holdings. However hedge funds are more aggressively managed as compared to mutual funds. They can take speculative positions in derivative securities such as options and can also short sell stocks which will increase the leverage of the fund. This means that hedge funds can also make money in an economic downturn. Mutual funds in comparison cannot take such leveraged positions and do not involve the same level of risk. Hedge funds also differ from mutual funds in their availability. They are only available to a specific group of investors with high net worth while mutual funds are available to any investors with even minimal amounts of money. There are a number of investment companies in India that invest in hedge funds as well as mutual funds of which Reliance mutual funds is a very good option.


Where can one find jobs that teach about hedge funds?

The best place to find out about hedge fund jobs is to visit the web site Hedge Co. They have sections called "Hedgeducation", "Hedge Fund Articles" and "New to Head Funds" among others.


How does a hedge fund differ a mutual funds?

Hedge funds and mutual funds are both managed portfolios in which the securities are picked by a fund manager. The securities that are picked are the ones that the manager feels will perform well and are grouped into a single portfolio. Portions of these funds are then sold to investors who are allowed to participate in the gains and losses of the holdings. However hedge funds are more aggressively managed as compared to mutual funds. They can take speculative positions in derivative securities such as options and can also short sell stocks which will increase the leverage of the fund. This means that hedge funds can also make money in an economic downturn. Mutual funds in comparison cannot take such leveraged positions and do not involve the same level of risk. Hedge funds also differ from mutual funds in their availability. They are only available to a specific group of investors with high net worth while mutual funds are available to any investors with even minimal amounts of money. There are a number of investment companies in India that invest in hedge funds as well as mutual funds of which Reliance mutual funds is a very good option.


What does it mean to be a partner in a hedge fund?

A partner in a hedge fund is an investor. Usually the hedge funds are limited partner legal entities. The investors are the limited partners and the investment manager is the general partner.


What schooling is required to become a hedge fund manager?

Because in most US states Hedge Funds are not regulated you generally do not need any licenses to manage a hedge fund. Due to the wide range of strategies hedge funds employ there is no set course or training session which can teach you want you need to know. A hedge fund that trades natural energy has a very different structure than a real estate or film fund.


Can US-based hedge funds invest in offshore hedge funds?

The certainly can invest in off-shore hedge funds. There are some restriction for individuals to invest in off-shore hedge funds, though, but hedge fund entities certainly can. Off-shore hedge funds offer certain tax advantages to overseas investors, as well as endowment funds, and non-profit organizations. Individual Americans, must declare their earnings from off-shore hedge funds so in that regard they are not better of than investing in on-shore hedge funds.


When do one need the services of an hedge fund attorney?

If you feel you've been wronged by a hedge fund or someone investing your money in a hedge fund then you might need an attorney. Since hedge funds are extraordinarily risky it's easy for a lawyer to argue it was wrong to invest in such a way.