Hedge Funds

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Hedge Funds

Originating in the USA in the 1950s, hedge funds once were only for the professional or institutional investor but are now increasingly being recommended by financial advisers to form part of private investors' portfolios.

Aggressively managed funds

The funds are aggressively managed with the aim of to delivering the highest returns.

They use a wide range of investments - stock, bonds, currencies, futures, options, indexes and others. They use techniques such as selling short (selling borrowed securities when prices are considered overvalued to then purchase after an anticipated rise in value) and leveraging (borrowing money to invest). Successfully managed hedge funds have often vastly outperformed equity markets.

High risk investments

Hedge funds are considered to be a high risk investment however they can provide a balance with traditional share investments. Hedge fund managers aim to protect the investor from volatility in a falling market. The term to 'hedge' means to mitigate risk.

It is possible to invest in an individual hedge fund or an increasingly popular option is to buy into a managed `fund of funds'. For more information, complete a Quick Enquiry Form