(CNBC) Though hedge funds often signal a freewheeling, shoot-from-the-hip investment style, for the most part these investment vehicles aim to dampen volatility. They do it by using various strategies that are supposed to provide protection from market volatility and sometimes even positive returns during market declines. “Someone who is concerned about the downside may want to allocate to hedge funds in case there is a big meltdown in the markets,” said Tayfun Icten, an analyst with research firm Morningstar, who follows hedge funds.
Hedge Funds Promise Downside Protection — and Risks
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