Hedge Funds 360

[Pages:139]Hedge Funds 360

Marco Avellaneda New York University & Finance Concepts LLC

Summary of the course

? Hedge Funds 360 is meant as an introduction to Hedge Funds, the new and not-so-new investment product which has flourished and gained media attention over the last 20 years

? HF AUM is approximately USD 2.5 Tn. In comparison, US debt is 14 Tn and investable assets are approximately USD 50 Tn.

? We will discuss

1. The point of view of investors

2. The point of view of managers

3. Main strategies & themes

4. A systemic view of HFs

Hedge Funds from the point of view of investors

Review: Mutual Funds

? In the US, mutual funds are regulated by the Investment Company Act of 1940

? Law designed to protect the public against unscrupulous managers ? Fees, diversification, concentration, transparency, are all regulated by IA 1940 ? Begins the modern era of equity fund investment in the US. ? Mutual Funds allow for cheap access to stock portfolio trading by the

public, encouraging saving in the stock market ? Defined by benchmarking in relation to a particular index or sector, e.g.

S&P 500, Russell 2000.

Main Characteristics of MF

? Long only (no short selling, no leverage) ? Tracking benchmarks or indexes ? Daily liquidity ? Low fees ( ................
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