Funds offer investment strategies for wide range of market conditions
While hedge funds were originally attractive only to a high net worth individuals and family offices, institutional investors are also keen to take advantage of the higher returns uncorrelated to markets that hedge funds represent.
Alfred Jones is credited with the creation of the first hedge fund in 1949. To neutralise the effect of overall market movement, he balanced his portfolio by buying stocks he expected to rise and selling short the ones he thought would drop in price. The effect was to ‘hedge’ part of the risk due to overall market movements.
The industry has grown rapidly with an estimated $3 trillion in assets under management. Hedge funds now account for close to half the trading on the New York and London
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