3 Great Hedge Funds
When you are in the market to add hedge funds to your investment portfolio, experts agree that it is best to start small, with just one, two, or possibly 3 great hedge funds that have a history of strong performance and an equally strong likelihood to continue that performance into the future. Learn more here about what a hedge fund is, how it works, and 3 great hedge funds with strong net gains that you may want to consider adding to your diversified investment portfolio.
What is a Hedge Fund and How Does it Work
A hedge fund is essentially a type of managed investment portfolio that contains a variety of stocks and securities and is actually a highly specialized form of mutual fund. When a hedge fund forms, the most common business structure to see is a private investment partnership, where a limited number of financial and management partners go in together with very high initial minimum investment requirements. Most hedge funds will not allow an investor to withdraw invested funds for a period of 12 calendar months once you have invested into the fund. Furthermore, because hedge funds are considered a type of investment that only high dollar, knowledgeable investors will be able to make, they are not regulated stringently the way the more common mutual fund is. For this reason, investors into a hedge fund must meet federal accreditation standards and have at least one million dollars in personal assets before being allowed to invest into a hedge fund. Investopedia describes hedge funds as "mutual funds for the super-rich" and this is highly accurate.
3 Great Hedge Funds
3 great hedge funds that have been making waves in the hedge fund arena include the Quantum Endowment Fund, the Renaissance Endowment Fund, and the Paulson & Co. hedge fund. While there continues to be disagreement amongst hedge fund experts about the best means of evaluating the top performing hedge funds annually, for hedge fund investors, choosing a standard of measurement is easy. Investors are seeking hedge funds that deliver consistently strong gains and a high return on investment. So, as an investor, evaluating hedge funds and choosing top performers will likely come down to a figure called "net gains", which signifies what remains after the costs of the fund management for the year have been subtracted out. For the Quantum Endowment Fund, run by hedge fund magnate George Soros, the first place award comes in at a $32 billion dollar net gain. For the Renaissance Endowment Fund, the number two prize honors come in at a $28 billion dollar net gain. And for the number three best hedge fund in terms of net gain, Paulson & Co., the hedge fund delivered a net gain of $26.4 billion dollars. The fact that Paulson & Co's net gain stands almost $10 billion above the next place contender, Moore Capital, showcases just how strong these 3 great hedge funds' performance really is, especially in light of the continued sluggish United States market economy to date.
