Hedge Funds 01 (Aug 08 - Nov 15)

[sidney]

If i not wrong, hedge fund originate in the 1950, 60 (somewhere there or even earlier.). The fund main purpose was to hedge positions.

Nowadays, hedge fund is known to us as "for accredited investors looking for alphas"

[kennynah]

thanks sydney... now you've successfully made me even more blur...


simi lai eh???

"for accredited investors looking for alphas"

[b0rderc0llie]

From Wikipedia, the free encyclopedia

Alpha is a risk-adjusted measure of the so-called active return on an investment. It is the return in excess of the compensation for the risk borne, and thus commonly used to assess active managers' performances. Often, the return of a benchmark is subtracted in order to consider relative performance, which yields Jensen's alpha.

For instance, although a return of 20% may appear good, the investment can still have a negative alpha if it's involved in an excessively risky position.

[kennynah]

tx bc ...

so...originally, hedge funds were created allow professionals to protect clients' portfolio of assets through some form of hedging against risks... which later evolved to a much different objective of finding alpha, or what seems like shangrila investments?

correct?

[b0rderc0llie]

I think they were created as something that is not tied to the market, thus offering another "asset class". Some are market neutral, and are supposed to offer absolute returns, independent of the stock market.

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From Wikipedia, the free encyclopedia

A hedge fund is an investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of investment and trading activities than other investment funds, and that, in general, pays a performance fee to its investment manager. Every hedge fund has its own investment strategy that determines the type of investments and the methods of investment it undertakes. Hedge funds, as a class, invest in a broad range of investments including shares, debt and commodities.

As the name implies, hedge funds often seek to hedge some of the risks inherent in their investments using a variety of methods, most notably short selling and derivatives. However, the term "hedge fund" has also come to be applied to certain funds that do not hedge their investments, and in particular to funds using short selling and other "hedging" methods to increase rather than reduce risk, with the expectation of increasing the return on their investment.

Hedge funds are typically open only to a limited range of professional or wealthy investors. This provides them with an exemption in many jurisdictions from regulations governing short selling, derivatives, leverage, fee structures and the liquidity of interests in the fund. This, along with the performance fee and the fund's open-ended structure, differentiates a hedge fund from an ordinary investment fund.
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[sidney]

thanks sydney... now you've successfully made me even more blur...


simi lai eh???

"for accredited investors looking for alphas"

Aiya.. sorry lar.. i only read n remember from textbooks... hahaha. i agree with the explaination in wiki

[sidney]

Accredited investors means must earn 200k income per year or have assets >2mil. Alpha is abnormal return as explained by wiki.. Hope next time can be accredited investor.. so that i koe i am loaded with money

[kennynah]

aiya....all so unnecessary....alpha lah...beta lah...

just say...rich, wealthy, loaded....mah enough lor....

when one is extremely loaded....call him jawnie, ah beng, ahmad, bayi, what does it matter...

[winston]

DJ Hedge Funds Up Again In Aug; Take In US$4.5B - Eurekahedge

HONG KONG (Dow Jones)--Hedge funds had their sixth straight month of gains in August, according to preliminary data from Eurekahedge, and took in US$4.5 billion during the period.

Globally, hedge funds were up 1.13% in August, and up 13.1% since the beginning of the year, according to the preliminary data.

The Singapore-based hedge fund data provider also confirmed that 300 new hedge funds have been launched so far this year, while 400 have closed.

European funds had the biggest gains, with average returns of 2.56%, while Asian funds were down 0.4% on average.

Japan-specific funds were up 0.7%, but their counterparts investing in Asia excluding Japan declined an average 1.1% in August, as regional stock markets fell after months of gains. China's stock market declined 21.8% in August, while Hong Kong's fell 4.1% and Taiwan's lost 3.6%.

Allocations into other regions also explain some of the underperformance of broader emerging market funds, which ended the month flat to positive, according to Eurekahedge's data.

All hedge fund strategies had positive returns in August. Managers of distressed funds were a standout with returns of 6.23%. Eurekahedge said the outstanding performance of a few emerging market-focused distressed funds funds positively skewed the strategy's index.

The Eurekahedge Distressed Debt Hedge Fund Index is up 22.54% so far this year.

Eurekahedge calculated its preliminary data based on 30% of the total net asset value of all hedge funds as of September 8. Final figures will be posted in several weeks.

Source; Ellen Sheng, Dow Jones Newswires

[winston]

Deadline of Oct 15, 2009 for Jan 1, 2010 Redemption.

Till date, I have not heard of or seen any news of heavy redemptions.