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Hedge Funds:Types of Funds
Hedge Fund are the indexes that are becoming more and more popular with every passing day among the hedge fund companies. Many of the hedge fund companies are formulating their own Hedge Fund. This serves as a great form of tracking the health of the sophisticated financial sector known as the hedge fund industry. The Hedge Fund of the different companies are at competition to out perform one another. The institutional investors find this Hedge Fund as very helpful because it acts as benchmark for the hedge fund.
Construction of the Hedge Fund is done on the basis of a certain underlying. They differ from one another on the basis of choosing of the underlying fund and the method used in the construction of the hedge fund. Due to the variations involved in the methodology of constructing the Hedge Fund, the results of the different indexes differ from one another though the ingredients chosen are the same.
The Hedge Fund includes those securities that are traded in the popular exchanges. The investors interested in investing in the Hedge Fund do need to follow the terms and conditions that have been set by the hedge fund company that is constructing the index.
The Hedge Fund is constructed by a hedge fund company through the adoption of certain strategies and specialized instruments those act as reflector of the whole hedge fund. These funds are structured in such a way that the tracking of the specific fund is done with minimum possibility of error.
Another type of Hedge Fund is also available which is categorized under the section in which no investment can be materialized. These funds are only used for tracking a wide array of index fund through the utilization of certain quantitative apparatus like mean, median, etc.
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