About Hedge Funds

Hedge Funds make sense. Most investors allocate their investment capital solely between stocks and bonds in an attempt to achieve a diversified, risk-balanced portfolio. Unfortunately, this approach is often ineffective since both stocks and bonds are negatively affected by increases in interest rates, economic uncertainty, market volatility and declines.

Private investment partnerships, often referred to as Hedge Funds, utilize a variety of non-traditional investment strategies. Many of these strategies, such as long/short , are largely uncorrelated with the performance of financial markets.

While the vast majority of mutual funds have underperformed the S&P 500 index over the last five years, the vast majority of all Hedge Funds have outperformed the S&P 500 index consistently, with lower standard deviation, risk and correlation to market indices. As a result, Hedge Funds comprise one of the fastest growing sectors of investment management, with over $3.0 trillion in managed capital at the end of 2009.