Hedge Funds
The term hedge fund is something of a misnomer: While some funds may employ strategies that are “hedged” in the traditional sense to mitigate or reduce risk, others may not hedge exposures or employ hedging techniques.
By simple definition, hedge funds are pooled investment vehicles that can invest in a wide variety of products, including derivatives, foreign exchange, and publicly traded securities.
Highly publicized reports of both disastrous and wildly successful hedge funds don’t always make it readily apparent how volatile a given hedge fund strategy may be.
- Most hedge funds are not widely available to the public directly
- Hedge funds are extremely diverse in structure, employing a great variety of investment strategies
- Hedge funds may concentrate their investments, employ leverage, or engage in other strategies that may offer potential for higher returns but may also pose additional volatility or risk
- Hedge fund regulation varies widely around the world; in several key jurisdictions (including the United States) such funds are relatively lightly regulated
The Asset Manager Code of Professional Conduct provides a set of globally applicable ethical and professional standards for firms managing assets, including hedge funds.
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Comment Letters
- Comment Letter to IOSCO on Hedge Funds Oversight, 30 April 2009 (PDF)
- Comment Letter to the European Commission - DG Internal Market and Services Consultation Paper on Hedge Funds, 30 January 2009 (PDF)
- Comment Letter to IOSCO on Proposed Elements of International Regulatory Standards on Funds of Hedge Funds, 6 January 2009 (PDF)
- Comment Letter to President's Working Group on Financial Markets: Best Practices for the Hedge Fund Industry, 16 May 2008
- Comment Letter to President's Working Group on Financial Markets: Principles and Practices for Hedge Fund Investors, 28 March 2008
- Comment Letter to FSA on Funds of Alternative Investment Funds, 22 May 2008 (PDF)
- Comment Letter to Congress on GAO Report: Hedge Funds: Regulators and Market Participants Are Taking Steps to Strengthen Market Discipline, but Continued Attention Is Needed, 27 March 2008
Press Releases
- Hedge Fund Industry Needs to Improve Investor Protection, Communication and Education, Says CFA Institute Centre, 11 June 2008
- CFA Institute Centre Calls for Single Global Hedge Fund Standard with a Greater Focus on Investor Protection and Ethical and Professional Conduct, 13 December 2007
Conference Proceedings
- "Hedge Fund Management at a Tipping Point?," from Hedge Fund Management, February 2007
Articles
- "Investing in Hedge Funds: A Survey" by Keith H. Black, CFA, April 2009
- "The Shame of Sham Due Diligence" by Ronald J. Surz for CFA Magazine, January/February 2009
- "How hedge fund managers can better serve their investors and avoid the pain of regulation," by Nitin Mehta for Euromoney Hedge Funds & Alternative Investments Handbook (PDF)
- "What Investors Should Expect from Hedge Fund Managers," Daily Financial Newspaper (PDF)
- "Golden Opportunity," CFA Magazine
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