Hedge Fund Firm Mutual Funds
Hedge Funds Try to Recoup Losses Through Mutual Funds
Hedge funds are still trying to recover past losses and one way hedge fund firms have found to make money is to launch hedge fund-like mutual funds. Many hedge fund firms are looking to net capital from smaller investors attracted to a mutual fund that uses hedging strategies to make returns. As of this point in 2010, at least a dozen hedge fund firms have launched these type of mutual funds.
As it turns out, mainstream mutual funds can pull in a lot of cash for the hedge-fund industry, which is still dusting itself off from an embarrassing fall during the financial crisis. So far this year, at least a dozen hedge-fund managers have launched mutual funds that use hedging strategies, according to researcher Morningstar Inc.
These moves might prove to be a boon for ordinary investors: An academic study suggests that hedge-like funds run by hedge-fund pros perform better than similar mutual funds offered by other providers.
Branching Out
Hedge funds were all the rage in the mid-2000s, but the 2008 financial crisis hit these investment pools for institutions and affluent investors hard. Not only did the funds go down in value, but also a lack of liquidity in some markets led many hedge funds to restrict investors' ability to pull their cash out. Hedge-fund holders were stuck continuing to pay steep management fees, leaving a bad taste in their mouths, says Nadia Papagiannis, a Morningstar analyst. Source
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