Hedge Funds
The term hedge fund is something of a misnomer: While some funds may employ strategies that are “hedged” in the traditional sense to mitigate or reduce risk, others may not hedge exposures or employ hedging techniques.
By simple definition, hedge funds are pooled investment vehicles that can invest in a wide variety of products, including derivatives, foreign exchange, and publicly traded securities.
Highly publicized reports of both disastrous and wildly successful hedge funds don’t always make it readily apparent how volatile a given hedge fund strategy may be.
- Most hedge funds are privately organized and not widely available to the public
- Hedge funds are extremely diverse in structure, employing a great variety of investment strategies
- Hedge funds can concentrate their investments in different types of assets in different markets around the globe, and can do so in a way that potentially heightens volatility and risk but may also bring higher returns
- Hedge fund regulation varies widely around the world, and in several key jurisdictions, including the United States, many are generally unregulated
The Asset Manager Code of Professional Conduct provides a set of globally applicable ethical and professional standards for firms managing assets, including hedge funds.
| Explore this Topic: |
Comment Letter
- Comment Letter to the President's Working Group on Financial Markets regarding Principles and Practices for Hedge Fund Investors (PDF)
- Comment Letter to Congress on GAO Report: Hedge Funds: Regulators and Market Participants Are Taking Steps to Strengthen Market Discipline, but Continued Attention Is Needed (PDF)
Articles