IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-3-030-91231-4_54.html
   My bibliography  Save this book chapter

Hedge Funds: Overview, Strategies, and Trends

In: Encyclopedia of Finance

Author

Listed:
  • John M. Longo

    (Rutgers Business School – Newark & New Brunswick)

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.

Suggested Citation

  • John M. Longo, 2022. "Hedge Funds: Overview, Strategies, and Trends," Springer Books, in: Cheng-Few Lee & Alice C. Lee (ed.), Encyclopedia of Finance, edition 0, chapter 54, pages 1249-1271, Springer.
    • Handle: RePEc:spr:sprchp:978-3-030-91231-4_54
    DOI: 10.1007/978-3-030-91231-4_54
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-3-030-91231-4_54. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.