Hedge Fund Industry Essay Example | Topics and Well Written Essays - 2000 words

Hedge Fund Industry - Essay moralThis can be used for both short and long term enthronements. Unlike mutual funds, however, prorogue funds typically take long and short positions in assets to abase portfolio risk arising from broad grocery getments.A evade fund may take long positions in certain stocks, and short positions in other stocks, the portfolio beta of which is close to zero. A beta close to zero implies that the portfolio will remain comparatively unchanged due to the broad market movement. Such a portfolio will primarily change if the stocks move more than the broad market.In the U.S., laws require that the majority of investors in the fund beaccredited. That is, theymust earn a lower limit amount of moneyannually and rush a net worth ofmore than$1 million, along with a significant amountof investment knowledge. (Hedge Fund. 2008).In both rising and falling equity and bond markets hedge fund strategies tend to have the ability to generate positive returns. Since it is a balanced portfolio it helps to reduce overall portfolio risk and volatility and, therefore, has the emf for increased returns. Hedge funds also have an advantage over other options of investment as it offers investors a wide variety of choices in Hedge fund strategies that can be tailor make to suit the investment objective of individual customers. The fact that hedge funds have higher returns and lower overall risk than traditional investment funds has been proved beyond doubt through academician research. Moreover, this platform provides an ideal long-term investment solution, eliminating the concept of correct time entry and exit from markets. Adding hedge funds to an investment portfolio provides diversification which is otherwise not available in traditional modes of investments. The aspiration of the likely employee Mr.X.Mr.X is undergoing a graduate course in commerce. His father Mr Y had remained employed in the insurance business, and precious his son to toe in the same line. Mr.X however, had different ambitions. He weighed the pros and cons of joining the hedge fund industry as well as the insurance sector. He sought the advice of different consultants in the field who gave him the prerequisite information. He found out that the hedge fund industry was more lucrative and he chose this as his career option. Initially he thought that an undergraduate course in commerce would give him the necessary inputs. When he completed more than half the course content, he realised that he will not able to pursue a career in hedge fund with the knowledge gained from this course alone. He came to know about a large variety of job oriented course relating to hedge fund. So, in the final semester, he pursued a part-time certificate course in hedge fund. Again, he realised that there was a gap between theory and practice. Thus, in order to receive round practical experience, he underwent an internship with a practitioner in hedge fund consultation.Human C apital suppositionHuman capital refers to the stock of productive skills and technical knowledge embodied in the labour unblock of an organisation. Economists consider human capital as one of the