Hedge Funds Certificates
These investment products allow private investors a chance to invest in the hedge fund arena. The certificates are issued across a basket of various hedge funds – similar to a fund of funds, which holds stakes in several different funds.
While classical investment funds focus on outperforming their corresponding benchmark, hedge funds use the entire spectrum of financial instruments to earn a yield independent of market developments. Aside from shares and bonds, they invest in currencies, commodities and futures such as options. Hedge fund managers are even allowed to sell short or to invest on loans. The pretense of this strategy is to earn profits even when prices are falling. A huge variety of investment strategies are represented in these funds. They range from following macroeconomic trends using investments in currencies or commodities to systematic but nevertheless highly risky trading in futures.
Moreover, hedge fund managers often require minimum investment levels to the tune of six figures. They are thus too expensive for most private investors as a direct investment tool. Besides of that hedge funds are better suited to being just one part of a mixed depot because of their highly risky nature.With comparably less investment capital, private investors can use Hedge funds certificates to benefit from hedge fund strategies and evenly distribute the risk.