Hedge Fund Investing

Hedge fund investing was previously reserved for the rich. However, nowadays, hedge fund investing is also for small investors. However, hedge fund investing is not for everyone. There are many different top hedge funds to choose from. Investing in hedge funds can give investors a wide range of investment strategies in one portfolio. Hedge fund investing adds value to diversity portfolios. This section of Hedge Funds website discusses what investors should know when investing in hedge funds.

How many investment strategies are there in hedge fund investing?

There are approximately 14 distinct investment strategies used by hedge funds, each hedge fund investment strategies offering different degrees of risk and return.

Types of Hedge Funds investing strategies

Macro hedge fund investing

A macro hedge fund investing, for example, invests in stock and bond markets and other investment opportunities, such as currencies, in hopes of profiting on significant shifts in such things as global interest rates and countries economic policies.

A macro hedge fund is more volatile but potentially faster growing than a distressed securities hedge fund that buys the equity or debt of companies about to enter or exit financial distress.

Equity hedge fund investing

An equity hedge fund may be global or country specific, hedging against downturns in equity markets by shorting over valued stocks or stock indexes.

Relative value hedge fund investing

A relative value hedge fund takes advantage of price or spread inefficiencies. Knowing and understanding the characteristics of the many different hedge fund strategies is essential to capitalizing on their variety of investment opportunities.