The world of investment is vast and rich in terms and options. Two of the most commonly used, but often misunderstood, financial instruments are investment funds and hedge funds. Each of them has distinct characteristics, and selection depends largely on the investor's objectives and risk tolerance. Here's what every investor should know.
Investment funds, or mutual funds, raise money from a large number of investors to buy a diversified portfolio of assets, usually managed by a fund management company. They are open to the general public.
- Diversification: Spreading risk by investing in a wide range of assets.
- Liquidity: They can generally be bought or sold on any trading day.
- Professional management: Assets are selected by expert managers.
Hedge funds are private equity funds that use more complex investment strategies to generate high returns.
- High return potential: Aggressive strategies to maximise returns.
- Diversity of strategies: They can invest in various assets, use leverage, sell short, etc.
- Lock-in periods: There may be periods during which investments cannot be withdrawn.
However, at de Ravel Finance, we have created the Smart Hedge Fund, a revolutionary hedge fund that retains all the advantages of a traditional hedge fund while eliminating its constraints, such as lock-up periods. With our Smart Hedge Fund, investors can take advantage of deposit and withdrawal flexibility, combined with high-level management expertise, to maximise returns without compromising liquidity.