Relevant to the following CISI qualifications: ICWIM, ICAWM, Securities, IISI
Dubai, Aug 28, 2019 (Issuewire.com) - Since 1949, Hedge Funds have been offering an outstanding opportunity to the investors. Recently, it has hit the headlines for being much beneficial in terms of raising capital. Hedge Funds are usually monitored by small teams of traders, portfolio managers and analysts. The professionals help the individuals in investing private pools of capital that comes up with few restrictions in which these experienced managers can speculate. This investment policy doesn't have to present public reports to the Securities & Exchange Commission (SEC) under the Securities and Exchange Act of 1934. Therefore, Hedge Funds are available only to the limited accredited investors.
This investment policy makes use of varied strategies to hedge the market risk though not all funds are hedged against the risk. According to the financial analysts, sometimes high volatile market is preferred to yield higher returns on the investment. One of the added advantages of this investment program is one can invest the capital in a large number of portfolios which is not available with other investment options. However, to gain maximum return on the investment, the experts use short-selling, leverage, arbitrage, and some other techniques as well.
The portfolio managers, therefore, get benefitted in both ways like they earn a management fee and an incentive or performance fee. The incentive part is, of course, an inducement to the portfolio managers as it encourages them to present outstanding performances and offers higher returns to the investors. This performance fee is calculated on the percentage of the benefit of the fund. The typical investment fees indicate to 2% of the fund's NAV per annum and a performance fee of 20% of the fund's profit.
However, the portfolio managers never disclose their strategies to the investors and therefore it becomes difficult for the public to understand how well or badly the fund managers are performing. Sometimes, the amounts of the hedge funds borrow as well as speculate with sums become larger than the investment amount. Moreover, a short-selling strategy often experiences high losses if the market risk is higher and the fund manager is unable to hedge against it. Also, the SEC and other relevant security regulators usually do not run a daily checking on the hedge fund activities.
The SEC and other securities regulators generally have limited ability to check routinely on hedge fund activities.
https://www.tadawul.academy/cisi-training-hedge-funds/
About the company:
Tadawul Academy is an Accredited CISI Training Partner that delivers training in English and Arabic. This service provider also owns and operates the first bilingual learning portal for CISI in the world. They deliver CISI training in Dubai, Abu Dhabi, Oman Qatar, Kuwait, Bahrain, and Saudi Arabia. You can learn more at www.tadawul.academy or visit www.TadawulExams.com.
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