Lot of people likes to invest their hard earned money in different ways. There are lots of ways one can invest the money. One of the most trusted and followed way is mutual funds and other one is in share market. But there are there are other investment options also available which are safe and sure to provide good returns for the investors. To invest in a hedge fund one should be well off financially. These hedge funds are privately managed funds and normally need high amount to invest.
One more thing with the hedge funds are fund managers will buy and sell the assets in high speed environment to keep up pace with the market condition. One has to understand that since hedge funds provide high returns the risk involved in the hedge funds are also high. So only who don’t mind taking a gamble should invest in the hedge funds and those who are scared about losing the money should not invest in hedge funds.
Portfolio of a hedge fund
One has to understand that hedge fund is a private fund and does not need to be registered with SEBI or does not need to disclose their NAV like the mutual funds. Normally the asset of a good hedge fund will be including derivatives, bonds, convertible securities, equities and currencies. From the asset itself one can understand how risky it is. But when you go for high returns there will be risk always. There is no money without the risk involved.
Hedge fund is definitely not for the first time investors. They should stay away from hedge funds till they gain experience in investing. Also, those who are not ready for high risks also should stay clear of these funds. In hedge fund your returns depends entirely on the investment manager. Hence one should be careful in choosing the investment manager.
Hedge funds are approved in US only as an alternative investments fund. Only qualified investors can invest in high value investing hedge fund. Some examples are banks, insurance companies and pension fund. Minimum amount to be invested by these investors is nothing but billion. Hedge funds investment strategy can expose funds to huge losses. Lock-in period generally for investment is relatively long. Leverage used by these funds can turn investments into a significant loss.
Hedge finances commonly have a forceful position on their ventures and look for better yields utilizing theoretical positions and exchanging subsidiaries and choices. They can take short positions (Short Sell) in the business sectors, while common assets can’t. Short selling permits these assets to profit even in the falling business sectors, which isn’t so for common assets.
Hedge funds are accessible just too High total assets financial specialists. While Mutual assets are open to the huge gathering of individuals. Indeed, you can begin a SIP with the sum as low as 10USD. To put it plainly, speculative stock investments are relatively high-hazard supports that point better yields contrasted with common assets. In any case, pick shrewdly and check if the chief’s technique works for you. A mutual funds is just one of the speculation roads, and it takes an inside and out examination to survey various choices. This is the place where Clear Tax Invest makes it helpful for you. We have explored for you and hand-picked the best performing assets from the top AMCs. Begin contributing.
Understanding a hedge fund itself is very tough task. There are lots of complex things involved in it. Legal compliance, Operations, qualitative analysis & technology related questions mean that due diligence of operation is important factor when it comes to hedge funds. If you can observe the loses and can hold on a loss making fund for a year and ready to wait for big fishes then you can go for the hedge fund and invest in it with right investment manager. Investment manager plays important role in this fund and you need to search well to find a good one.
One of the important factors regarding it is not regulated as mutual fund. It is mainly for institutional investors and individual investor who have large amount of financial backup and not for small time investors. One of the negative sides of investing in Hedge funds is the lock in period during which you can’t sell or enchase the shares. Normally a typical hedge fund will have 1 year lock in period which means you have to hold the fund even if it is not performing. One more problem is you need to provide asset management fee of 1-2% of assets and 20% of hedge fund profit as Performance fees to the investment manager. Since the risk is high you need to find a person who is really good in this field.