Hedge funds

Discussion in 'Trading' started by lmn, Sep 11, 2005.

  1. lmn


    Following are questions from a friend regarding hedge funds. Since I know little about this area, can anyone please offer some help?

    1. Investment period. I have heard that for most hedge funds, investors can only exit at the end of a quarter or a semi-year. Is there also a minimum investment period? That is, does an account have to stay in a particular fund for some period before it can be withdrawn?

    2. Guaranteed returns. Do any hedge funds offer guaranteed returns for certain periods? If so, do they charge higher fees, or something like that, for compensation?

    Thanks indeed.
  2. I know of a Hedge fund listed on the FTSE -Man Group- and you can get in and out of it when you fell like.

    Returns on this paticular fund can be over 15% a year.

    No hedge fund as far as I know can guarantee protection from losses and therefore any kind of return.
  3. On the other hand if you are interest in guaranteed investments you could purchase bonds based on the movement of major indices that offer little lower returns but total protection from losses and you are paid interest rates at maturity.
  4. Investment minimums and lockup periods vary from fund to fund. In general, more established funds with larger asset bases and stability of returns have longer lockups with larger minimum investments.

    No fund can guarantee a return. There are structured products available that offer principal protection (ie you cannot lose your initial investment), but the lockup period is generally >3/4 years.