In Focus: Hedge Funds

by Tony Clifton [Your Program Focused]

Just like the last week, I'll point your attention to some real investing, although it will again require large funds. Even if you have not enough money to invest it is useful to know about them so you can plan your future.

What is a Hedge Fund
If you see a HYIP with some name, containing "Hedge Fund" you can be almost 100% sure it is scam. The hedge funds are not accepting low spends, do not work with e-gold and most often are private. They are lightly regulated investment funds which often use unconventional strategies. In general they are risky and achieve better results than the mutual funds.
The hedge funds can invest as usual in forex, stocks or bonds, but you can also find ones which commit various arbitrage trading, work with managed futures, long or short trades, equities and many more. As with the HYIPs you can find also funds of funds which are oftena good pick.

How much to excpect
Of course the ROI vary. In general you should be pretty happy if you find a hedge fund producing more than 50% yearly yield in long term. However, in short terms the funds can achieve really crazy HYIP-like returns. In the several reviewed funds later in the article you will see some historical performances.

How to join/invest
In the short reviews below you will not find contact informations or URLs of the funds. Usually the access to such infos is been sold by services, such like Hedge World or Hedge Fund Research. The fees for sale or membership (depending on how do these services charge) are not too low and usually exceed $500 per year. So you should be really serious that you wish to invest.
However there are also cool free services like The Magnum Group where you can register and see the full informations. Of course their databases of funds are much smaller.

What are the minimums
They vary a lot, but in general you will not find funds accepting less than $5,000. Often the minimum will be at least $100,000.

Several examples

1. SP Trader. Surprisingly, the URL of this one is publicli available - SPTrader.com.
Average ROI: 70% per year for the last 6 years. The minimum investment is only $6,250

2. Greater Europe Fund Ltd
Average ROI: Average ROI: 49% per year for the last 5 years. In the highest year they have achieved 132% ROI. The contact data and minimums are not freely available

3. Galleon Omni Technology Fund Series A
Average ROI: ~25% per year for the last 10 years. Full access here after free registration. The minimum investment however is $250,000.

4. Kaizen Fundamental Value Fund
Average ROI: 54% per year for the last 4 years. Full access here after free registration. The minimum again is $250,000

In Conclusion

Although the hedge funds have nothing to do with the HYIP scams, you still need to do somebasic Due diligence and to ensure that there won't be theft.
The bad side is that most funds require too high minimums, but a possible strategy is to pool funds with trusted friends or partners and participate.
The hedge funds are long term investments. The ROI is usually not as high as with the HYIPs, but still 40% - 50% yearly is very good.Additionally if you are willing to gamble a little bit, you can move funds from fund to fund if you want to target their high years. Many hedge funds has some great years achieving ROI over 200%.

Published at Jun, 26 '06 ; read 3643 times;

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User comments:

clifton at Jun, 27 '06 16:55
This was received by one of our readers, Ira: "This company: SPTrader.com. that was listed in the Hedge discussion may be a problem. No one can get real info in them and on their site, nothing seems to work. Check it out. The D.D. done on it may be faulty." As usual, be careful whenever you invest
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Donald Martin at Jan, 14 '07 16:54
Does anyone know anything about SPTrader Funds.
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clifton at Jan, 15 '07 16:03
Well, their site is still alive, but I don't know about anyone in the HYIP community who has done some research on them
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Oscar at Apr, 20 '08 14:02
"you still need to do somebasic Due diligence and to ensure that there won't be theft." Very true :)) - http://www.foxnews.com/story/0,2933,288703,00.html - Oscar
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Oscar at Apr, 20 '08 14:13
Famous quadriga / superfund lets you get started with 5K - http://www.superfund.com/HP07/Superfund_Fonds.aspx - Btw if really interested in hedgfunds the superfund site offers plenty of good info. Worth your time to study this site. - Oscar
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