difference between hedge fund and mutual fund?

Discussion in 'Professional Trading' started by chipmunk, Oct 26, 2011.

  1. Is it simply the way the manager makes comm's? Or is it in the strategy? What does an average Mutual Fund charge?
  2. MTE


  3. "Hedge fund" isn't a technical legal term but is basically just a loose umbrella term for private pooled investment vehicles that don't need to be registered under the Investment Company Act of 1940. Often "hedge funds" are engaged in a continuous raising of capital, require a large minimum investment, have a performance-based fee in addition to an asset-based management fee, use leverage, engage in short selling, and have a long lock-up period for withdrawals.

    Mutual funds have lots of restrictions as set forth in the Investment Company Act of 1940.