For many people hedge funds need some kind of explanation, so before starting with our list of 6 magazines for hedge fund managers let us tell you what a hedge fund is. A hedge fund in simple terms is an alternative investment vehicle which is, sort of, exclusive to people or institutions with significant assets. Historically hedge funds managed to generate significant outperformance which is why they are very popular among investors today. By some estimates, hedge funds collectively manage more than $3 trillion worldwide. We don’t think it is wise to invest in most hedge funds today. Most good hedge funds are already closed to new investors; so, you can’t get in even if you wanted to. Hedge fund managers also don’t like to share their alpha with their investors and increasingly invest in large-cap stocks where they can’t generate any meaningful alpha.
Insider Monkey developed an investment strategy that is based on public filings of what hedge funds are buying and selling. Since investors can’t get into the best hedge funds, this is really the only alternative. Our investment strategy was launched at the end of August 2012. In 34 months following its launch our strategy returned 135% vs. 55% gain for the S&P 500 Index. Our stock picks beat the market by 80 percentage points in less than 3 years. Most hedge funds couldn’t get even close to our returns. You can download a free sample issue on this page.
Hedge funds are similar to mutual funds in many ways, they are pools of securities and they can also invest in various forms of securities. Having said that, there are a few major differences between the two as well.
Unlike mutual funds U.S Securities and Exchange Commission, also known as SEC does not currently regulate hedge funds extensively. However, this may about to change as regulation for hedge funds may soon be coming. Second and probably the biggest difference is the fact that hedge funds enjoy the liberty to invest in many other types of securities (since it is not yet regulated), which is not possible under mutual funds. Along with investing in some traditional securities like real estate, bonds, and stocks, hedge funds are well known to use risky and sophisticated investment techniques. Examples include investment in derivatives (options and futures.) Thirdly, mutual funds are more liquid than hedge funds. This means you can easily sell your share since the price per share is calculated daily. In the case of hedge funds investors commit to a longer period of time known as “lockup period” during which they can’t pull their investment out.
Finally mutual and hedge fund managers are also paid differently. Mutual fund managers are compensated irrespective of the performance of the investment. On the other hand hedge fund managers usually get a percentage of what they earn as a return on investment.
Due to these differences, hedge funds offer a great alternative to traditional types of investment. With more risk this investment technique brings with it higher returns. For those of you who want to know more about hedge funds and hedge fund managers read our post “What is a Hedge Fund Manager? Here’s How to be One”. To always stay connected and get the latest news from the world of hedge funds – here are top 6 magazines for hedge fund managers.