Hedge Fund Strategies: Funds of Funds

April 14, 2009

Hedge funds once catered to the ultra-wealthy and required “qualified investors” with $1 million in net worth or $250,000 or more in liquid assets to invest, as a minimum. As the category became more competitive and saturated, hedge fund managers sought creative ways to bring in funds from the merely affluent. One way to do this […]

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Why Invest in Managed Futures?

April 9, 2009

Last time, we looked at what managed futures are, and the commodity trading advisors (CTAs) that operate these types of hedge funds. Today we’ll look at why a qualified or institutional investor would want to use them. Managed futures have historically shown a very low correlation with more traditional asset classes such as stocks and […]

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Hedge Fund Strategies: Managed Futures

April 7, 2009

When you think of futures, you may think of the famous Chicago Mercantile Exchange, and dozens of traders screaming out orders for commodities such as soybeans, pork bellies or grains. While these commodities are part of the futures market, today’s futures traders generally focus more on financial products such as interest rates, equity indexes, precious […]

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Distressed Securities Investing: When Bad News is Good News

April 2, 2009

Last time we looked at what distressed securities hedge fund investing was all about, and the types of securities they buy. Now we’ll examine how these investors are able to pick up bonds and other fixed-income securities at bargain prices. Bankruptcies often happen in waves. In the 1980s, the airline industry was suffering. In the […]

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Hedge Fund Strategies: Distressed Securities

March 30, 2009

A company facing bankruptcy may not sound like an attractive investment opportunity, but it can be for those who understand the dynamics of distressed securities. Distressed securities are the capital structures of a particular company or government that is either in default, under bankruptcy protection, or heading in that direction. Because of the risk of […]

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Hedge Fund Arbitrage Strategies

March 26, 2009

Last time we looked at what arbitrage is: profiting from small prices differences in securities or between markets. Today we’ll look at some of the more common ways hedge fund managers use arbitrage to make profitable trades in hedge fund jobs. Arbitrageurs use leverage, short-selling, derivatives and synthetic securities (matching one asset with a combination […]

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Hedge Fund Strategies: Arbitrage

March 23, 2009

Arbitrage is an exotic-sounding name for a group of strategies that try profit from price differences between securities or markets. For example, suppose a hedge fund trader noticed that a stock is trading at $11.98 in New York and $11.99 in London. He would buy as many shares as possible in New York, using leverage […]

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