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The purpose of a hedge fund is to ‘hedge’ ie deliver alpha and not index beating returns. Obviously the fee issue is another layer.
by testval123 2y ago
The purpose of a hedge fund is to ‘hedge’ ie deliver alpha and not index beating returns. Obviously the fee issue is another layer.
- jfengel 2y agoThat was the original idea. They realized that they could also run the risk equations in reverse and make index beating returns, at least in the short run, and pretend that they could also do it in the long run. Hedge funds got a reputation as overpowered mutual funds for the wealthy.