Hedge funds minimal risk


Based on several real

Example generic hedge fund based on a few actually existing European funds, which have demonstrated excellent financial results in the late 90's, presented in tables and figures.

Decisions to invest in various financial instruments based on a thorough analysis of the expected return of the fund managers and the possible risk. The fund invests in growth stocks of U.S. stock market to hedge more than 90% of open positions of options contracts, as well as transactions in the money market. If the stock market shows a positive development, the selected growth stocks typically show a positive rate of return for the entire fiscal year. You can specify the corporations based on an analysis of their economic indicators, ongoing economic policy and growth prospects of their shares on the stock market. Opt for the ones who have the greatest prospects for growth in the sector of the economy for the middle and deep investment horizons. The portfolio consists of more than ordinary shares, and their substitutes (futures and swaps).

The purpose of the fund - the preservation and increase of capital through an active management with limited risk. The figure shows the dynamics of yield growth fund for two years, starting in 1998 we see a satisfactory yield growth of the hedge fund, despite all the market turmoil of the storm and during the study period. Helped properly selected portfolio of assets, the structure of which is also shown in Fig. But the issue of attracting to his side an additional number of institutional investors is still open. One way to solve this problem - wide advertising of traditional risk and return characteristics of hedge funds instruments. But this - the theme of the next publication.

Part 2

In the previous issue of the "Sun" tells the managed money markets - in particular, hedge funds. Despite the boom hedging industry in the past two years, the issue of attracting new institutional investors is still relevant. One way to achieve this goal - wide advertising of traditional risk and return characteristics of the instruments of hedge funds. About it - in a new paper by Yakimkin.

Which one to choose?

Large investors usually do not want to invest in assets that are not quantified. With the development of a system of indexing diversified portfolios of hedge funds instruments from institutional investors appear numerical data that you can always compare the results of investing in financial instruments other classes.

These indices allow us to construct a model of past portfolio containing instruments of hedge funds, which once again shows the positive aspects of this type of tools that will improve to the same and very diversified. The creators of the index of hedge funds are also able to offer a secondary market financial instruments created on the basis of this index. Currently, the most common hedge fund indices are CSFB and Van Hedge Fund Index. Their high liquidity allows institutional investors to play each index by buying the individual components. Weight in the index as a whole based on the level of market capitalization major hedge funds included in the index.