Why Hedge Funds are Popular Among HNI's?

Subscribe to GoodReturns
For Quick Alerts
Subscribe Now  
For Quick Alerts
For Daily Alerts

    Hedge Funds are similar to Mutual funds where funds pool investors money and invest with an aim to make profit. Hedge funds are sometimes called as ‘rich man's mutual fund'. A hedge fund is a popular product overseas as it generates absolute returns by investing across assets.

    In some countries policies have been initiated to provide hedge fund as alternative investment options to retail investors.

    Why Hedge Funds are Popular Among HNI's?

    This is a growing segment of asset management industry which is becoming popular not only with high networth individual (HNI) investors but also popular among institutional investors including university funds, pension funds, insurance and endowments.

    Unlike, mutual funds, hedge funds are more flexible. Hedge funds are NOT subject to the same regulatory requirements as Mutual Funds.

    Hedge funds tend to make more profit in all kinds of markets as they are allowed to leverage, short-sell and other speculative investment practices that are not often used by mutual funds. Hedge funds, are at times detected to be speculative and volatile due to short selling and other strategies involved.

    However, hedge funds though are not regulated like mutual funds, they may come under scanner subject to market abuse laws and anti-money laundering procedures.

    Hedge funds are also investing in emerging markets in expectation of high returns. Several emerging market regulators have opened their markets to offshore hedge funds by providing authorization as registered foreign investors.

    The major benefit in hedge funds is they have the ability to generate positive returns in rising and as well as in falling equity and bond markets.

    While, the committee recommended that the hedge funds which are marketed and sold directly to retail investors should be subject to the same disclosure requirements as other Collective Investment Schemes in India.


    Read more about: hedge funds
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more