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Article: Opinion: Inside View - Dispelling the media myths and magic of hedge funds.
- Article from:
- Pensions Week
- Article date:
- September 4, 2006
CopyrightCOPYRIGHT 2006 FT Business. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Francois Barthelemy
Hedge funds have enjoyed so much media exposure that one would be forgiven for believing there are no mysteries left. Wishful thinking.
As a hedge fund picker, I am often struck by the divergence between myth and reality. Hedge funds are not risky; they are not about running high risks, they are about reducing them. These funds are heavy users of hedging strategies - advanced investment instruments - to reduce risk and exposures to the market.
This is why, on average, hedge funds made as much money as equities during the bull market, but continued to perform well during the bear market.
For example, in the ...