Hybrid funds India
The hybrid funds, also widely termed as Balanced Funds are results of the requirement to straddle two parts of the world. It is the wisest procedure to frame a problem and it’s solution on the same page. The collaboration of debt and equities securities make up a hybrid fund. The return strategies involved in a hybrid fund is all decided by the skeleton of the bund and the amount of risk associated in the funds.
Hedge Funds- the meaning in broader spectrum
The investment funds that aim in pooling the capital from diffrent institutional investors or accredited investors and in turn invests the capital in variety of assests, many a times with associated risks and complicated factors of portfolio construction, are Hedge Funds. Hedge funds in simple terms are structures administered by professional and licensed investment management firms where the main investment is done on mainly liquid assests.
Hedge Funds vs. Mutual Funds
The major difference between a hedge fund and a mutual fund lies in the claim of percentage share from the profit made, where hedge fund charges a 20% of the profit but mutual funds do not have any such quotient. Hedge funds are accessible to high-end investors and reputed investing firms unlike mutual funds which are available to gerenal public. High risk associated investments are the basic property of a hedge fund, but high risk investments are not made in mutual funds. Hedge funds tend to be more aggressive and more profit making than a mutual fund.
Hedge Funds- the types and the strategy
The types of hedge funds widely accepted are Fixed Income Arbitage, Fund of Hedge funds, Global Macro Funds and Long or Short Equity funds. There are endless reputed hedge fund bodies all over the globe today.
The hedge funds run on the formula of charging a percentage of performance fee and management fee on the amount of profit made. The percentage of assests under the management gives the calculation for a 2% management fee deduction from the profit made. This percentage may also vary from 1% to 4% depending on the type of fund. The performance fee is calculated based oin the amount of profit made., in absence of which the performance fee gets nullifed. A 20% percent of performance fee is charged from the profit made in a hedge fund. This makes the basic startegy of hedge funds making money from the profits of the investments. A hedge fund analyst can make upto $175,000 and $200,000 per annum, that literally makes some sense in today’s economy.