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Article: HEDGE FUNDS RISKIER THAN MUTUAL FUNDS.(Business)(Column)
- Article from:
- Seattle Post-Intelligencer
- Article date:
- December 27, 1999
CopyrightCOPYRIGHT 1999 Seattle Post-Intelligencer. All rights reserved. Reproduced with the permission of the Dialog Corporation by Gale Group. 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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Question: I have a friend who thinks the market will drop 20 percent in the near future. He put his money into hedge funds. Can you explain how this type of investing works and describe the typical profile of a hedge fund investor?
Answer: Hedge funds are similar to mutual funds in that they are professionally managed pools of investment dollars from a number of investors. However, hedge funds tend to be a riskier investment.
First, hedge funds, unlike mutual funds, are neither regulated nor reviewed by the Securities and Exchange Commission. Hedge funds have no restrictions on what they invest in.
Hedge funds may also use significantly more ...