Hedge Funds: Overview, Strategies, and Trends

John M. Longo ()
Additional contact information
John M. Longo: Rutgers Business School – Newark & New Brunswick

Chapter 54 in Encyclopedia of Finance, 2022, pp 1249-1271 from Springer

Abstract: Abstract Hedge funds are quite likely the most important investment vehicles in the financial markets today since they control roughly $3.8 trillion in assets and account for the bulk of trading volume across many asset classes. They also tend to attract “the best and brightest” investors due to high levels of remuneration and fewer investment restrictions relative to public investment funds. This chapter provides its readers with a firm understanding of the hedge fund industry, their most common investment strategies, and the trends shaping the field. It also provides detailed examples of three specific hedge fund strategies: dual share class arbitrage, pairs trading, and activist investing. Hedge funds in their various forms may play a useful role in most individual and institutional portfolios due to the prospect of higher risk adjusted returns, as well as the lack of correlation with traditional stock and bond portfolios. In short, they may improve the Markowitz Efficient Frontier of most portfolios. The industry is still evolving on a global basis and its continued growth will likely result in the further compression of fees, payment for alpha instead of beta, increased liquidity, improved transparency, wider accessibility, and increased regulation.

Keywords: Hedge funds; Hedge fund history; Hedge fund strategies; Hedge fund trends (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-91231-4_54

Ordering information: This item can be ordered from
http://www.springer.com/9783030912314

DOI: 10.1007/978-3-030-91231-4_54

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().