Hedge fund is an alternative investment that uses pooled funds, and it is also the focus of basic knowledge of stock introduction. These funds use different strategies to obtain positive returns or alphas for investors. Hedge funds can actively manage or use derivatives and leverage in domestic and international markets, with the goal of generating high returns.

It is worth noting that hedge funds are usually only open to certified investors because they need fewer SEC rules than other funds. One aspect that distinguishes the hedge fund industry is that compared with mutual funds and other investment instruments, hedge funds face less supervision.

Every hedge fund is established to take advantage of some identifiable market opportunities. Hedge funds use different investment strategies, so they are usually classified according to their investment style, which is very different from venture capital.

The history of hedge funds

As the company of Alfred Winslow Jones, a former writer and sociologist, AW Jones launched its first hedge fund at 1949. 1952, Jones changed the structure of investment tools from general partnership to limited partnership, and increased the incentive fee of 20% as compensation for the managing partner.

In the introduction of stock trading, with the evolution of the trend of hedge funds, in order to maximize returns, many funds turn to Jones strategy, which focuses on stock selection and hedging, and choose to participate in high-risk strategies based on long-term leverage. These strategies caused heavy losses in 1969-70, and then closed some hedge funds during the 1973-74 bear market.

In the early 1990s, high-profile fund managers abandoned the traditional mutual fund industry and sought the fame and wealth of hedge fund managers. Unfortunately, history repeated itself in the late 1990s and early 20th century, because some high-profile hedge funds, including Robertson, failed in an amazing way. Since then, the hedge fund industry has grown dramatically. According to the 2065 438+08 Preqin global hedge fund report, today's hedge fund industry is huge-the total assets managed by the industry exceed $3.2 trillion. According to Barclays' statistics, the total assets managed by hedge funds increased by 23.35% between 1.997 and 20 1.8.