what does hedge fund do?

Answer 1

A hedge fund is no more than a limited partnership that manages the pooled assets of the investors (limited partners) and the manager (the general partner).

Hedge funds are effectively free to pursue whatever investment strategies, approaches, and vehicles desired by the GP.

The term "hedge fund" is actually a misnomer. A lot of hedge funds don't hedge (i.e., they may be long-only or short-only), and a lot of hedge funds eschew the reputation of "investment cowboys" and implement very conservative investment approaches.

Think "limited partnership".

Answer 2

In simple terms, this is an alternative fund which you can invest into. It tries to make profit whether or not the market is going up or down. So is something good to have within a conventional unit trust portfolio. Hedge funds have a low correlation to equities, some target 8% return for 4% risk, other good ones have managed 18% for last 10 years for a risk between 6-8%. Unfortunately for the latter it is only available in Singapore to sophisticated investors i.e. you need to have a networth of $2m or more.

Usually for hedge funds you don't know what the manager is doing as they are 'guarding their secret'. They can deploy any investment strategy they want. And their main aim is to achieve 1-2% gain every month regardless of market conditions. But they also have a stake in the funds themselves if they want to be the hedge fund manager probably >US$2m.

Answer 3

hedge fund is a fund that that is set up to hedge against inflation. do take note of their annual management fee and sales charge. cheers

Answer 4

a hedge fund is another kind of investment fund, the difference is the company will employ more unconventional ways of investing to "hedge" or minimise/control the risk of their investments.