In foreign practice, the term "hedge fund" has been used for more than 50 years, but even now, many professionals find it difficult to give a precise definition of this financial institution.The problem lies in the variety of strategies and tools that use a variety of hedge funds, as the subjects of investment activity, so it becomes incredibly difficult to accommodate all of their activities in one definition.
The most important difference from traditional investment funds - the ability to use alternative strategies such as short selling.This means that income hedge fund has a much lower correlation with the direction of the market, in contrast to conventional.In addition, the hedge fund is able to make a profit, including a falling market, to invest not only in securities but also in currencies and derivatives, so the hedge fund industry is very diverse in terms of the analysis of the behavior of their strategies different informs of objects and subjects of investment activity.
Responsibility of subjects of investment activity, and the group of hedge funds including, reflects how entities are subject to the investment or other risks.
Investing in the Russian financial market can be attributed to a group of technologies and strategies for investing in the markets of developing type.The distribution of the effectiveness of hedge funds using this strategy, not only has the highest rate of standard deviation, but the high rate of excess.Traditional subjects of investment activity subject to this trend as well as hedge funds.
Traditionally, hedge funds, financial institutions are considered high risk and originally intended for wealthy individuals.The main interest of institutional investors in the hedge funds came after three years of "bear" market in 2000-2002., When the stock and bond markets are not profitable, unlike the hedge fund industry.A similar situation is observed now, when large institutional investors are beginning to look for opportunities to invest in hedge funds.
To analyze the possibility of reducing the risk of the portfolio via investing in a hedge fund can imagine a hypothetical fund consisting entirely of mutual investment fund "X".This fund is supposed to be focused on profit due to market conditions and the market value provided by its increase in investing in various types of debt, primarily in bonds of various types and purposes.The choice of specific types of securities for the implementation of the strategy takes place on the basis of a detailed analysis of the credit characteristics of the issuer based on how likely the prospects of further positive revaluation of credit risk, as well as to increase rankings in market conditions.Thus, since the object of investment are bonds, the risk factors of the investment fund is less than that of the RTS index.
analysis shows that hedge funds can and should be viewed as an investment tool that subjects of investment activity can implement to significantly enhance portfolio returns and reduce risk.There is a huge potential for fund managers of hedge funds in a systematic approach to the diversification of its portfolio, taking into account the correlation between hedge funds using different strategies and tools to achieve a significant reduction in the risk and improve the risk / return ratio.
use of such technology and resources to a large extent also expand and variability of action when investing for the subjects of this activity.