The global hedge fund industry ended 2016 with approximately $3 trillion in global assets under management, up from approximately $2.9 trillion in the prior year, according to data released by Hedge Fund Research Inc.
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The Asset Manager Code provides a set of globally applicable ethical and professional standards for firms managing assets, including hedge funds. Hedge fund regulation varies widely around the world in several key jurisdictions (including the United States) such funds are relatively lightly regulated.Hedge funds may concentrate their investments, employ leverage, or engage in other strategies that may offer potential for higher returns but may also pose additional volatility or risk.Hedge funds are extremely diverse in structure, employing a great variety of investment strategies.Most hedge funds are not widely available to the public directly.
Highly publicized reports of both disastrous and wildly successful hedge funds don’t always make it readily apparent how volatile a given hedge fund strategy may be. The term hedge fund is something of a misnomer: While some funds may employ strategies that are “hedged” in the traditional sense to mitigate or reduce risk, others may not hedge exposures or employ hedging techniques.īy simple definition, hedge funds are pooled investment vehicles that can invest in a wide variety of products, including derivatives, foreign exchange, and publicly traded securities.