Some people concerned about rough markets ahead are turning to hedged mutual funds, according to a Wall Street Journal article. Though still a fraction of the overall market, hedged mutual funds keep attracting assets even as performance lags. Along with mutual fund providers, private equity firms like Blackstone and traditional hedge funds are moving aggressively into the market.
For regular investors who may not be able to meet hedge fund minimums, hedged mutual funds offer an interesting way to get exposure to alternatives, as well as other strategies, to boost returns in a weaker market — such as short selling, leveraged buying and derivatives, for example. They also offer greater transparency, daily trading and lower pricing than traditional hedge funds.
